Tech Industry

Stocks take flight on homes, goods data

Both major indexes post strong gains as investors digest the latest round of encouraging economic reports.

The Dow Jones industrial average shot up 171 points to 10,625.01 Wednesday as investors applauded a pair of encouraging economic reports. The Nasdaq composite index tacked on 43 points to finish at 2,059.62.

In economic news, orders for big-ticket manufactured items jumped sharply in March, but the strength was confined to transportation-related goods. The Commerce Department reported that durable goods orders rose 3 percent to $205.12 billion in the month, their largest gain since November of last year.

Data on new U.S. homes also indicated the economy isn't doing too badly. Sales rose to a record rate in March, the government said in a report suggesting the housing market is holding up well.

"If you're looking for argument that the consumer isn't falling out of bed, just look at housing sales, which have done extraordinary well," Ed Cimilluca, who helps oversee $250 million for ING Furman Selz, told Reuters. "But in terms of capital spending, a lot of tech companies have themselves a problem."

Further illustrating that problem, UBS Warburg analyst Nikos Theodosopoulos downgraded several networking equipment stocks Wednesday, saying U.S. telecommunications companies will continue to cut back on spending in 2001.

Companies cut from "buy" to "hold" recommendations were ADC Telecommunications, off 16 cents to $7.50; Avici Systems, unchanged at $11.27; Cisco Systems, down 53 cents to $15.73; and Ciena, which gained 87 cents to finish at $57.54.

Nortel Networks clipped 34 cents to $15.16, and Lucent Technologies closed off 5 cents to $10.20.

Microsoft moved up $2.14 to $69.69, Sun Microsystems lost $1.03 to $16.05, and Oracle picked up 26 cents to close at $17.23.

BMC Software shares fell $3.61 to $23.54 after the company's fourth-quarter earnings report. Though BMC topped estimates, it lowered its outlook for the first quarter and full year.

The appointment of a new CFO didn't do much for PurchasePro. The company's shares fell $2.17 to $4.05 after an eleventh-hour profit warning quashed high hopes for the first quarter.

AOL Time Warner rallied up $2.25 to $49.50. Yahoo closed up 67 cents to $18.68, and and CMGI finished up 41 cents and 23 cents a share, respectively. eBay jumped $3.84 to end at $48.40.

Online news site CBS posted a smaller-than-expected loss for the first quarter, but its revenue slipped along with demand for advertising. The stock inched up a penny to $2.75.

Among widely held PC issues, Dell Computer rose $1.14 to $26.99, Compaq Computer gained 25 cents to $17.75, Gateway picked up 24 cents to $18.25, and Apple Computer closed up 69 cents to $24.72.

Intel slid 14 cents to $29, Advanced Micro Devices shed 45 cents to $26.90, and IBM moved up $2.18 to finish at $114.85.

Staff and Reuters contributed to this report.