Markets close higher, extend rally in technology stocks

Associated Press

NEW YORK — Stock prices rose for a second straight day today as bargain-hunting investors extended a broad rally in technology stocks.

After spending the early part of the session in negative territory, the Dow Jones industrial average recovered to close up 83.61 at 10,226.59, according to preliminary calculations.

Broader indicators were also higher. The Nasdaq composite index rose 64.49 to 3,483.09. The Standard and Poor’s 500 index was up 89.16 at 1,396.92.

"Most of the bad news is out of the way. We’re having a rally based on stocks being as cheap as they’ve been in a long time," said Barry Berman, head trader for Robert W. Baird &amp Co.

Technology issues continued their upward trek, lifting the Nasdaq. Microsoft traded up $3.31 at $65.19, extending a nearly 20 percent gain from the previous session. Chip maker Intel, another bellwether issue, was also up again, rising $1.13 to $43.06.

And Internet stocks were up across the board, led by eBay, which reported strong third-quarter earnings late Thursday. After rising more than $5 earlier in the session, the online auction company ended up 88 cents at $58.06.

Internet parts and services companies were also up. Fiber optics company JDS Uniphase jumped $12.44 to $102.38, Ciena climbed $9.61 to $149.50 and America Online gained $1.11 to $46.55.

With earnings reports from most of the widely-held bellwether companies already announced, Berman said the one remaining concern on investors’ minds is the unstable situation in the Middle East, where skirmishes between Palestinians and Israeli troops intensified Friday despite a truce announced earlier this week.

"We’ll see next week whether that resolves itself," said Berman, the Baird analyst.

Analysts said the selloff in blue chip stocks early Friday was typical for the session immediately following a strong move upward. "This is just daily trading noise," said John Cleland, chief investment strategist at Security Benefit Group.

Much of the activity on the Dow appeared related to talk that United Technologies was considering buying out Honeywell for $40 billion. Both companies are Dow components. United Technologies fell more than $7 on the news, but recovered after the companies called off merger talks and its shares finished down $2.75 at $65.25. Honeywell closed up $10.50 at $46.63.

Stock traders also continued their focus on corporate earnings, a day after the major indexes rebounded from one of the biggest plunges this year.

A warning from Circuit City of lower than expected quarterly earnings set the retailer’s stock down $7.63, or 36 percent, to $13.81. Wireless communications company Ericsson also fell, down $2.31 to $11.69, after it warned of weak fourth-quarter earnings.

But Merck climbed $4.19 to $81.75 after the pharmaceutical company beat Wall Street’s third-quarter estimates.

Advancing issues outnumbered decliners by a ratio of 4 to 3 on the New York Stock Exchange, where volume came to 1.17 billion shares, behind the 1.29 billion traded Thursday.

The Russell 2000 index was up 5.88 at 487.18.

Overseas, Japan’s Nikkei stock average rose 2.62 percent. Germany’s DAX index was off 0.16 percent, Britain’s FT-SE 100 rose 0.92 percent, and France’s CAC-40 rose 1.37 percent.

Copyright ©2000 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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