MIDDAY MARKETS: Techs shrug economic data

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Investors shrugged news that worker productivity is on the rise, and bought into techs again at midday Tuesday. The Nasdaq rose 3.71 to 3866.70 and the Dow Jones industrial average climbed 50.18 to 10,917.19.

The Inter@ctive Week @Net Index rose 3 to 514.06.

In economic news, a report from the U.S. Labor Department showed worker productivity rose at a 5.3 percent pace in the second quarter, well above the 1.9 percent gain posted in the first quarter. Though the news suggests the economy is still growing at breakneck speed, investors now expect that the Federal Reserve won't raise rates when it meets next on Aug. 22.

Lernout & Hauspie (Nasdaq: LHSP) fell 7 1/4 to 29 3/4 Tuesday after it issued a statement denying charges of inconsistencies in its Korean business. Story

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). Verizon lost 5 7/8 to 42; NorthPoint rose 1/4 to 15 1/4.

PSINet (Nasdaq: PSIX), up 2 3/16 to 20 1/2,, said Tuesday its second-quarter loss was $1.32 a share, a penny less than the loss expected by First Call Corp.

On the IPO front, AOL Latin America (Nasdaq: AOLA), the joint venture between America Online (NYSE: AOL) and the Venezuela-based Cisneros Group, edged up 25/32 to 8 25/32 in debut.

Active Power (Nasdaq: ACPW) priced 8 million shares at $17, after raising its range to $14 to $16 from $11 to $13 a share.

Pemstar (Nasdaq: PMTR), the only profitable tech company debuting Tuesday, priced its 8.4 million shares at $11 each, the bottom of its $11 to $13 a share range.

Yahoo! (Nasdaq: YHOO) was down 1 1/8 to 135 3/8 , Amazon (Nasdaq: AMZN) lost 1 to 32 13/16 and AOL (NYSE: AOL) rose 9/16 to 53 9/16.

Cisco (Nasdaq: CSCO), which will report quarterly results after Tuesday's bell, was down 1/8 to 66 1/8. Among other leading tech issues: Sun Microsystems (Nasdaq: SUNW) fell 1 1/16 to 110 11/16, Oracle (Nasdaq: ORCL) rose 15/16 to 82 13/16, Intel (Nasdaq: INTC) fell 1/2 to 62 7/16, and Microsoft (Nasdaq: MSFT) was up 1 3/4 to 71 3/4.