MARKET CLOSE: Productivity data lifts markets

2 min read

Strong economic data suggesting inflation remains in check helped spark another rally on Wall Street Tuesday as the Nasdaq composite shot up 105 points to close at another record high of 4,427.12.

The Dow Jones industrial average moved up 52 points to finish at 10.957.60.

The rally was driven by a report that showed tame inflation despite a tight labor market. Fourth-quarter productivity, measuring the output per hour of workers outside the farm sector, jumped a strong 5.0 percent in the fourth quarter, while unit labor costs surprised with a 1 percent decline.

"The numbers are very, very impressive ... It has very positive implications for inflation," said Hugh Johnson, the chief investment officer at First Albany Corp. "It costs less to produce more because of the investments in technology."

Microsoft Corp. (MSFT) charged up 3 5/16 to 109 15/16. Oracle Corp. (ORCL) trimmed 3/8 to 59 9/16 and Sun Microsystems Inc. (SUNW) closed up 1 1/4 to 87.

There was good news and bad news Tuesday for Buy.com (Nasdaq: BUYX), which jumped 12 1/8 to 25 1/8 in its initial public offering. Fastnet (Nasdaq: FSST) closed up 4 5/8 to 16 5/8 in its debut.

America Online Inc. (AOL) added 2 to 59 while Yahoo! Inc. (YHOO) and Amazon.com Inc. (AMZN) closed up 19 1/2 and 8 1/8 a share, respectively. Lycos Inc. (LCOS) gained 5/16 to 72 1/16 and eBay Inc. (EBAY) closed up 3/16 to 164 3/4.

Barnesandnoble.com (Nasdaq: BNBN) lived up to its pre-announcement and reported strong sales for the fourth quarter Tuesday. However, its shares closed off 9/16 to 11 1/8.

Shares in Phone.com (Nasdaq: PHCM) a maker of software that allows Internet connections through wireless devices, lost 2 5/16 to 136 after it announced it would buy Paragon Software.

Informix Corp. (Nasdaq: IFMX) fell 2 to 14 1/2 after the maker of database and other business software said International Business Machines Corp. (NYSE: IBM) has filed a lawsuit against it. IBM shares closed up 4 5/8 to 118 5/8.

Among widely held PC stocks, Dell Computer Corp. (DELL) trimmed 9/16 to 37 1/16 after Warburg Dillon Read tagged it with a downgrade; Compaq Computer Corp. (CPQ) rose 13/16 to 27 13/16; Gateway Inc. (GTW) lost 3 3/4 to 59 5/16 and Apple Computer Inc. (AAPL) jumped 13/16 to 114 7/8.

Breakaway Solutions, Inc. (Nasdaq: BWAY), an e-business software company, lost 15 to 106 after it reported a fourth quarter operating loss of $2.6 million, or 15 cents a share, on sales of $10.6 million.

Intel Corp. (INTC) rose 15/16 to 108 13/16 and Advanced Micro Devices Inc. (AMD) closed up 1/16 to 41 3/8.