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Nasdaq blasts off as Dow sinks

Rebounding slightly from several down days, investors clear tech stocks for liftoff but ground old economy shares.

Investors cleared tech stocks for liftoff but grounded old economy shares.

The Nasdaq composite index rose 139.12, or nearly 4 percent, to 3,865.64, and the Standard & Poor's 500 index climbed 15.39 to 1,459.90.

The Dow Jones industrial average fell 19.23 to close at 10,789.29 led by International Paper, which dropped $2.19 to $28.75.

As of yesterday's close, the Nasdaq had lost 11 percent this month, and the Dow was down nearly 4 percent.

"There's a very tentative glass-is-half-full attitude on the Street right now," said Phil Dow, a market strategist at Dain Rauscher Wessels. "Everyone is waiting for news on the third quarter. That's when people start feeling strongly about 2001 numbers."

Dow added that the markets will trade in a tight range for the next few weeks until third-quarter earnings numbers give "a sense of certainty" about the third quarter and beyond.

Jeff Logsdon, director of research at WR Hambrecht agreed that the Nasdaq could continue its slide or start ascending from a trough.

"It's a little bit of a tug-of-war right now in the Nasdaq," he said.

Large-cap tech shares helped push the markets higher. At the end of regular trading, Intel jumped $4.56 to $60.38; Cisco Systems rose $1.94 to $62; Microsoft climbed $2 to $65; and Qualcomm gained $7.69 to $77.50.

The CNET tech index rose 107.25 to close at 3,103.64. Winners thrashed losers, with 77 of the 97 stocks in the index rising and 20 falling.

Of the 18 sectors tracked by CNET Investor, semiconductor companies posted the sharpest gains, rising 7 percent. Makers of computer peripherals were the day's only losers, slipping 1 percent.

The Philadelphia semiconductor index surged 77.22, or 8 percent, to 1,028.58, led by Advanced Micro Devices (AMD), which rose $3.50, or 13 percent, to $30. Micron Technology rose $6.75 to $65.25, while Broadcom moved up $13.06 to $235.28

Chip stocks got a boost from positive analyst comments. Banc of America Securities raised Intel and AMD to "buy" from "market perform."

Among members of the CNET tech index, Adobe, a maker of Web design software, jumped $10.88 to $152.88.

E-commerce software developer VeriSign gained $8.34 to $188.19, and Veritas Software climbed $8.63 to $130.

Cobalt Networks was the second-largest percentage gainer on the Nasdaq. Sun Microsystems, one of the biggest makers of computers that run Internet sites, said it would buy the company for about $2 billion in stock to add to its line of computer servers. Cobalt rose $16.06, or 39 percent, to $57.19.

Barnesandnoble.com rose $1.38, or 30 percent, to $5.94 after the company announced a marketing agreement with Yahoo, the second-biggest provider of Web content. Rival online bookseller Amazon.com fell $2.06 to $40.75.

The good mood in the tech sector failed to lift shares of software maker PeopleSoft, which fell $3.13, or 10 percent, to $28.25. Broadbase Software, a competitor to PeopleSoft, said yesterday it will buy closely held Servicesoft for about $645 million in stock.