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Techs recover on economic hope

The Nasdaq, which was sagging all day, moves into the black after President Bush urges Congress to push through an economic stimulus package.

Technology stocks, which had been sagging all day, moved into the black Friday after President George W. Bush urged Congress to push through an economic stimulus package.

The Nasdaq composite index gained 7.99 to close at 1,605.30. The index was in the red most of the day after new employment data and profit warnings. The Dow Jones industrial average also rebounded, picking up 58.89 points to close at 9,119.77.

The markets recovered from earlier lows after President Bush urged Congress to pass tax relief of at least $60 billion in new tax cuts to help cushion the nation's economy from last month's deadly air attacks.

"Investors are looking for action by Washington, and they're looking for quick action," said Peter Coolidge, managing director of equity trading at Brean Murray. "Today's comments reinforce the hope of the market that we will get a quick, significant stimulus package that will give the economy a needed shot in the arm."

Unemployment figures stayed level at 4.9 percent, but the U.S. economy lost 199,000 jobs in September, its biggest loss in a year, according to the Labor Department. Job cuts were especially hefty in the manufacturing sector.

Analysts following the data expected the unemployment rate to rise to 5 percent. But the way the data was collected means it likely didn't reflect the impact of the Sept. 11 attacks. Job loss related directly or indirectly to the events of that day should begin to appear in the October results, said Katharine Abraham, commissioner of the Labor Department's Bureau of Labor Statistics.

"It confirms what we already know, that the economy was in dismal shape before Sept. 11 and is in significantly worse shape thereafter," said Ward McCarthy, managing director of Stone & McCarthy Research Associates in Princeton, N.J.

In technology news, Sun on Friday said it will lay off 9 percent of its work force and that its first-quarter results will miss estimates. The company now expects a first-quarter loss of between 5 cents and 7 cents a share, and revenue in the range of $2.7 billion to $2.9 billion. First Call's consensus estimate indicated that Wall Street was expecting the computer systems maker to report a loss of 4 cents a share on $3.29 billion in revenue. Shares were up 58 cents at $9.87.

AMD slid 40 cents to $8.60 after announcing it would report a pro forma loss between $90 million and $110 million, or between 26 cents a share and 31 cents a share, not including an $80 million to $110 million restructuring charge. The company blamed the earnings shortfall on fierce price competition from Intel. AMD last month said it would lay off 15 percent of its work force.

Shares of Gateway recovered a bit, up 15 cents to $5, a day after the PC maker cut estimates for the third quarter. Gateway warned Thursday evening that it expects to report a pretax loss of between 14 cents to 17 cents per share for the third quarter.

Among other heavily traded tech issues, Intel rose 41 cents at $21.96, Oracle was up 41 cents at $14.20, Microsoft rose $1.28 at $57.72, and Cisco Systems rose 52 cents at $14.94.

Amazon.com was up 16 cents at $7.20, and Yahoo fell 33 cents at $10.35.

Staff and Reuters contributed to this report.