MIDDAY MARKETS: Economic news ignites rally

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Techs revived Thursday morning after new data suggested the economy could be cooling off, leading to speculation the Federal Reserve might ease off on interest rates hikes. The Nasdaq Composite Index rose 135.46 to 3,536.37 and the Dow Jones Industrial Average climbed 125.08 to 10,647.41.

The Inter@ctive Week @Net Index gained 21 to 442.53.

The Nasdaq bounced Thursday morning as economic data suggested a slowdown could be underway. The National Association of Purchasing Management report showed May manufacturing activity dropped more than expected, with its prices paid component -- a measure of inflation -- dipping sharply. The U.S. Commerce Department also reported construction spending declined 0.6 percent in April.

Investors still await the Labor Department's employment report for May, due out before the market opens Friday.

After putting off its pricing for more than a week, fiber optic networking company ONI Systems (Nasdaq: ONIS) finally priced its 8 million shares at $25. The wait paid off; shares jumped 54 to 79, or 216 percent.

Atmel (Nasdaq: ATML) shimmied up 2 5/8 to 40 13/16. Thursday after announcing it will supply Qualcomm (Nasdaq: QCOM) with chips for its sixth-generation CDMA chipsets. Qualcomm shares rose 2 3/4 to 69 1/3 after China Unicom, said its plans to build a network powered by Qualcomm's CDMA technology are still on track, according to a report in China Daily.

PurchasePro.com (Nasdaq: PPRO), up 1 51/64 to 23 1/16 announced a deal with Hilton Hotels (NYSE: HLT), down 3/16 to 8 5/16, to create a network for the hospitality industry and establish the industry's largest purchasing exchange. Commmerce One (Nasdaq: CMRC) was up 3 27/32 to 39 5/8 and Ariba (Nasdaq: ARBA) was up 5 1/4 to 57 3/8.

Softbank said it has sold 3.16 million shares in Yahoo! (Nasdaq: YHOO), up 7 25/64 to 120 29/64. Analysts speculate it may use the $336 million profit to purchase a failed Japanese bank. Softbank is the largest shareholder of ZDNet.

Microsoft (Nasdaq: MSFT)rose 2 11/32 to 64 29/32 as the end neared for its two year antitrust trial.

Among other leading tech issues: Dell (Nasdaq: DELL) rose 9/16 to 43 11/16, Intel (Nasdaq: INTC) was up 3 15/16 to 128 5/8, Cisco (Nasdaq: CSCO) rose 2 5/8 to 59 9/16, Sun Microsystems (Nasdaq: SUNW) gained 4 11/16 to 81 5/16 and Oracle (Nasdaq: ORCL) was up 4 11/16 to 76 9/16.

Amazon.com Inc. (Nasdaq: AMZN) lost 3/8 to 47 15/16 and America Online Inc. (NYSE: AOL) rose 3/4 to 54 1/8.