The Dow Jones Industrial Average advanced 84.77 points, rising above 11,000 to a record 11,031.59. The tech-heavy Nasdaq Composite Index also closed ahead, up 31.34 points at 2,503.
Many technology stocks that closed in the red yesterday performed much stronger in the afternoon to close in positive territory.
Computer giant IBM led PC hardware stocks to a strong close. IBM gained 7.75 to finish the day at 217. Analyst Gary Helmig at SoundView Technology Group reiterated his "buy" rating on the company's stock and said that IBM's stock could reach 225 in 12 months, according to Bloomberg News. IBM had exceptionally strong PC and mainframe sales in April, and the company's PC server business should thrive in the second quarter, Helmig told Bloomberg.
Among other computer makers, Hewlett-Packard jumped 2.62 to 79.93, and Dell rose 0.75 to 40.18. Gateway inched up 0.06 to 64.18, Compaq rose 0.12 to 24.75, and after a weak opening, Apple also rose, up 1.37 at 45.87.
In the Internet sector, eBay traded higher, but other online retailers fell. eBay, which saw its shares jump 9 points earlier in the afternoon, rose 1.18 to 176.68 at the close. Fellow cybershop Amazon.com fell 1 to 136.37, and Onsale dipped 0.25 to 24.25.
Internet directories, which rallied in the morning, were mostly mixed at the close. Shares of America Online fell 1.68 to 118.06, and Yahoo dropped 4.43 to 147.43. Infoseek edged 0.5 higher to 51.12, and Excite jumped 4.56 points to 161.56 in the afternoon.
Phone giant AT&T was lower one day after the big Microsoft news. As reported, Microsoft yesterday said it will invest $5 billion in AT&T and also announced a series of agreements with the phone giant in a move to boost its position in Internet services.
AT&T shares closed down 1.5 at 60.43, while Microsoft rose 1.12 to 79.06.
Reuters and Bloomberg contributed to this report.