Tech Industry

Investors don their rally caps

Technology stocks lead a broad market rally, breaking a string of losses and posting the third-highest percentage increase in a single day.

Technology stocks led a broad market rally Thursday, breaking a string of losses.

"It's really because we have had such a compression of valuations and such pessimism in the market that we were bound to have a sharp snap back," said Charles Lemonides at M&R Capital Management, which oversees $300 million. "It may or may not be long-lasting."

The tech-heavy Nasdaq composite index rose 146.29 to 1,785.09, snapping a run of three consecutive losing sessions and posting its third-highest percentage increase in a single day. The S&P 500 gained 48.21 to 1,151.46. The Dow Jones industrial average closed at 9,918.05, up 402.63, the second-best point gain ever for the blue-chip index.

Dell Computer picked up $3.06 to $25.25 after it told analysts it would meet expectations and post a profit of 17 cents per share on sales of $8 billion in the first quarter.

Other PC-related stocks rose, including Compaq Computer, up $1.36 to $17.16; Apple Computer, gaining $1.37 to $20.87; Intel, advancing $3 to $25.63; Microsoft, moving up $4.81 to $56.75; and Advanced Micro Devices, up $2.28 to $23.02.

Yahoo shares soared $3 to $15.44 after Lehman Brothers analyst Holly Becker encouraged investors to buy the stock. Becker said in a research note Yahoo may be hitting its bottom, and things could begin to pick up again.

Akamai Technologies said Wednesday it would report a narrower-than-expected loss, but warned revenues would fall short of expectations, and announced plans to lay off 14 percent of its work force. Analysts downgraded the stock, but shares rose $1.50 to $7.50.

Shares of WebMethods also managed to rise $2 to $19, despite news Thursday that the company would miss fourth-quarter expectations.

BMC Software shot up $4.22 to $23.30. The maker of software for mainframes and client-server networks said after market close that it sees better-than-expected quarterly results.

XO Communications gained $1.45 to $4.23 after the company said it has enough cash to fund operations into the first half of 2002.

IKOS Systems slid $2.44 to $7.56. The maker of systems used by designers of integrated circuits said it would miss analysts' second-quarter estimates.

Aspen Technology tumbled $6.02 to $12.98, following the business-software vendor's earnings warning.

An earnings warning also shook shareholders of Phoenix Technologies, which fell $3.19 to $8.69.

Among other heavily traded tech stocks, Cisco Systems rose $1.25 to $14.94, Lucent Technologies picked up $1.19 to $7.94, and EMC advanced $4.80 to $31.75.

Staff and Reuters contributed to this roundup.