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Market Close: Techs retreat on interest rate fears

Technology stocks retreated Thursday on fears that high growth stocks could be hurt if the Federal Reserve raises interest rates.

The technology-infused Nasdaq Composite Index dropped 29.04 to 2403.37, the @100 Index slid 30.8 to 4506.27, and the @Net Index retreated 5.72 to 276.76. The Dow Jones Industrial Average gained 85.8 to 10663.69, erasing Wednesday's losses. The S&P 500 rose 4.73 to 1299.54.

If the latest job statistics, scheduled for release Friday, show strong employment growth, some observers believe that could give the Fed more ammunition for a rate increase. Economists said the employment growth likely moderated in May but probably not enough to prevent the Federal Reserve from hiking interest rates in the near-term.

The stock market has been highly sensitive to economic data since the Fed shifted to a tightening bias on interest rates last month.

Ancor Communications Inc. (Nasdaq: ANCR) gained 3 13/16 to 14 1/16, after inking a deal to provide Sun Microsystems Inc. (Nasdaq: SUNW) with its switches.

Best Buy Co. (NYSE: BBY) climbed 6 1/8 to 54 after the retailer said it expects to beat consensus expectations for its first quarter. Tandy Corp. (Nasdaq: TAN) gained 2 9/16 to 83 13/16 after its RadioShack unit reported a 17 percent rise in May sales in stores open longer than a year.

Internet services and consulting firm IXL Enterprises Inc. (Nasdaq: IIXL) rose 5 7/8 to 17 7/8 in its first day trading. Shares opened at 15 1/8 after pricing last night at $12 a share for its 6 million share initial issue.

Oracle Corp. (Nasdaq: ORCL) added 1 5/16 to 27 1/2 after the company said it expected to cut $1 billion in expenses annually. Microsoft Corp. (Nasdaq: MSFT) lost 2 1/16 to 76 3/8 and Computer Associates International Inc. (NYSE: CA) dipped 3/4 to 48 1/4.

Proxim Inc. (Nasdaq: PROX) rose 2 1/4 to 43 3/4 after Motorola Inc. (NYSE: MOT) announced a $10 million investment in the home networking products maker. Motorola inched up 1/16 to 82 3/4.

Qualcomm Inc. (Nasdaq: QCOM) advanced 3 3/16 to 102 1/16 after positive comments from a Lehman Brothers analyst.

Winstar Communications Inc. (Nasdaq: WCII) gained 2 1/2 to 57 after the company converted $120 million worth of its convertible debt to common stock, thus ending payment of dividends on the debentures.

Hewlett-Packard Co. (NYSE: HWP) gained 1 3/4 to 91 1/2 after the computer giant said it expects double-digit sale growth in the second half. Dell Computer Corp. (Nasdaq: DELL) slid 5/16 to 33 13/16. International Business Machines Corp. (NYSE: IBM) dropped 1 to 112 3/4 and Gateway Inc. (NYSE: GTW) fell 5/8 to 58 9/16.

Intel Corp. (Nasdaq: INTC) lost 1 7/16 to 50 1/2 and Advanced Micro Devices Inc. (NYSE: AMD) fell 11/16 to 17 13/16.>