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Nasdaq continues ascent as Dow sees red

The tech-heavy Nasdaq climbs higher in afternoon trading following a hard hit yesterday, while the Dow continues to sink.

U.S. stocks were mixed in the afternoon as the tech-heavy Nasdaq climbed higher following a hard hit yesterday, while the Dow continued to sink into the red.

The Nasdaq Composite Index jumped 47.18 points to 2,392 in afternoon trading, while the Dow Jones Industrial Average lost 11.74 points to 10,428.

Positive earnings news from Internet and tech companies sustained an afternoon rally in Net issues, giving the Nasdaq a major lift.

Software giant Microsoft gained strength after a weak market opening. Shares of the company rose 1.25 to 82.25 ahead of its third-quarter earnings report, expected today at the market close. The company could help computer shares rebound if investors are encouraged by its earnings report, said Peter Cardillo, research director at Westfalia Investments. Earnings are expected to be 32 cents a share for the third quarter, according to First Call.

A narrower-than-expected second-quarter loss lifted shares of E*Trade from yesterday's tumble. The online broker posted a pro forma loss of $14.3 million, or 12 cents a share, beating the 17-cent loss projected by analysts at First Call. E*Trade jumped 24.7 percent, up 18.25 to 92.06 after the company dropped as much as 17.7 percent in yesterday's beating. The stock fell 41 percent in the past week. Ameritrade also rose, surging 26.7 percent, up 23.53 to 111.4 in afternoon trading.

Internet directories Yahoo, Infoseek, and America Online were all trading stronger in the afternoon. Shares of Yahoo rose 7.87 to 171.56, Infoseek jumped 5.5 to 51.12, and AOL gained 10.62 to 126.5.

"It has always been perceived as a buying opportunity when these stocks correct," said Philip Tasho, chief investment officer for Riggs Investment Management. Tasho said he expects the rebound in computer-related stocks to be short-lived, saying they're still overvalued.

Meanwhile, PC hardware stocks traded higher in the afternoon, led by large-percentage gainer Dell. PC makers Apple, Compaq, and Gateway were all in positive territory. Shares of Apple rose .62 to 34.5, and Compaq shares gained .56 to 23.31. Dell jumped 2.43, or 6.8 percent, to 37.87, and Gateway gained 3 to 62.5.

Shares of some of last week's biggest gainers on the Dow, including Chevron and International Paper, traded much weaker in the afternoon, dragging the Dow lower. Chevron shares dropped 5.87 to 96.06, while International Paper fell 2 to 53.75.

Bloomberg contributed to this report.