A chip-stock rally pushed the Nasdaq composite up 50 points to close at 1,902.41, while the Dow Jones industrial average shaved off 83 points to finish at 10,019.65.
Analysts were impressed by the tech sector's strength following Tuesday's triple-digit gains. In recent months, most of these run-ups were followed by some quick profit taking.
"Investors are starting to feel that perhaps we have found a bottom, and we are starting to build a base," Guy Truicko, equity portfolio manager at Unity Management, told Reuters. "The worst of it may be ending. We might have a little bit more downside, but it doesn't look like a lot more."
The bulk of Wednesday's technology gains followed an upgrade for the semiconductor sector from Salomon Smith Barney analyst John Joseph.
Intel (Nasdaq: INTC) closed up $2.76 to $27.53, and fellow chipmakers rallied after the influential Wall Street analyst raised his ratings on a host of stocks. Joseph argued semiconductor stocks could gain despite sluggish fundamentals. The conclusion counters a bearish report from Lehman Brothers on Monday. Applied Micro (Nasdaq: AMCC) moved up $3.01 to $19.39 while Micron Electronics (NYSE: MU) and National Semiconductor (NYSE: NSM) shot up $3.45 and $1.85 a share, respectively.
Motorola (NYSE: MOT) shares fell 10 cents to $12.90 after missing estimates in its latest quarter, posting on Tuesday its first operating loss in more than 15 years. It caused a stir Wednesday by predicting an alarming retro trend: a return to the 1970s economy. Motorola CEO Chris Galvin said in a conference call today that the technology sector is in a recession and "reflects the boom and bust of the high-tech cycles of ྐ-ྑ, or perhaps even the ྆-྇ time frame."
Among widely held PC stocks, Dell (Nasdaq: DELL) inched up 49 cents to $26.75, Compaq (NYSE: CPQ) rose 25 cents to $17.60, Gateway (NYSE: GTW) trimmed 48 cents to $15 and Apple Computer (Nasdaq: AAPL) closed off 24 cents to $21.80.
Another disappointment for investors came from EMC (NYSE: EMC), off $2.19 to $32.21 after the data storage giant said its first-quarter earnings will fall short of Wall Street estimates amid a slowdown in information technology spending. The company also cut its growth projections for 2001. Veritas (Nasdaq: VRTS) gained $1.44 to $58.75.
Microsoft (Nasdaq: MSFT) picked up $1.32 to $61 while Oracle (Nasdaq: ORCL) and Sun Microsystems (Nasdaq: SUNW) added 56 cents and $1.66 a share, respectively.
America Online Time Warner (NYSE: AOL) gained $1.19 to $41.20. Yahoo (Nasdaq: YHOO) clipped 16 cents to $15.86, while Amazon.com (Nasdaq: AMZN) and CMGI (Nasdaq: CMGI) moved up $1.31 and 20 cents a share, respectively. eBay (Nasdaq: EBAY) closed off 28 cents to $39.17.
Cisco Systems (Nasdaq: CSCO) shot up $1.54 to $17.40. Lucent Technologies (NYSE: LU) tacked on 6 cents to $7.28, and Nortel Networks (NYSE: NT) finished up 3 cents to $14.48.
ZDII staff and Reuters contributed to this roundup.