MARKET CLOSE: Productivity report sparks blue chips

2 min read

Tech stocks lost some of their steam Tuesday but blue-chip issues moved higher following some encouraging productivity numbers from the Labor Department. The Nasdaq shed 14 points to end at 3,848.56 while the Dow shot up 110 points to finish at 10,976.89.

"The Nasdaq's had a hard time putting together back-to-back winning streaks and with three days under the belt, we're seeing a little bit of profit-taking in the mid-session," said Bryan Piskorowski at Prudential Securities.

The Labor Department reported worker productivity rose at a 5.3 percent clip in the second quarter, well above the 1.9 percent gain posted in the first quarter. Economists said the strong performance suggests the Fed will be inclined to leave interest rates alone later this month.

Microsoft (MSFT) shares made a nice move, gaining 4 1/8 to 74 1/8. Oracle (ORCL) added 1 1/8 to 83 and Sun Microsystems (SUNW) closed up 1/8 to 83.

Lernout & Hauspie (Nasdaq: LHSP) dropped 7 3/16 to 29 13/16 after it issued a statement denying charges of inconsistencies in its Korean business. Story

Yahoo! (YHOO) shares fell 2 3/8 to 134 1/8 while Amazon.com (AMZN) and Lycos (LCOS) shed 7/8 and 1 13/16 a share, respectively. America Online (AOL) gained 5/16 to 53 5/16 and eBay (EBAY) closed up 1/4 to 50 1/4.

Verizon Communications (NYSE: VZ), which is entering the third day of a strike by 85,000 union members, announced an $800 million deal to merge its digital subscriber line business with NorthPoint (Nasdaq: NPNT). Its shares closed off 5 5/8 to 42 1/4 while NorthPoint trimmed 3/4 to 14 1/4.

Among widely held PC stocks, Dell (DELL) lost 1 to 41 11/16; Gateway (GTW) inched up 1/8 to 59 7/8; Apple Computer (AAPL) fell 1 3/16 to 46 3/4 and Compaq (CPQ) hustled up 1 1/16 to 31 1/16.

Intel (INTC) shares lopped off 1 5/16 to 61 5/8. Advanced Micro Devices (AMD) clipped 4 to 61 and IBM (IBM) ended up 2 7/16 to 118 3/4.