Tech stocks light fire
on Wall St. at midday

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By Lisa Singhania
Associated Press

NEW YORK >> Technology stocks soared today, helping the Dow Jones industrials rise more than 170 points in a broad-based rally prompted by Cisco Systems' assertion that its business is stabilizing.

The buying also sent the Nasdaq composite index up more than 3 percent. Analysts were pleased with the advance, but noted stocks have surged before only to fall on bad corporate news or profit-taking by investors unconvinced the worst is over.

In afternoon trading, the Dow was up 175.89 at 10,405.04, a 1.7 percent gain.

Broader indicators also recorded hefty advances. The Nasdaq climbed 58.03 to 1,901.00, while the Standard & Poor's 500 index was up 18.24, or 1.6 percent, at 1,180.33.

Advancers led decliners 3 to 2 on the New York Stock Exchange. Volume came to 715.40 million shares, compared with 625.03 million at the same point yesterday. The Russell 2000 index rose 3.70 to 477.12.

The price of the Treasury's 10-year note was down 15/32 point, or $4.69 per $1,000 in face value, while its yield rose to 4.93 percent from 4.87 percent yesterday. The 30-year bonds were down 3/4 point and yielded 5.46 percent, up from 5.41 percent yesterday.

The gains come after weeks of repeated selling that sent the market down to levels not seen since April's big selloff. Even with today's advance, all three major indexes are below where they started the year: the Dow down 3 percent, the Nasdaq off 23 percent and the S&P off about 10 percent.

Although the market has mounted several rallies since hitting its lows for the year in the spring -- none have stuck.

"We've just been back and forth in this trading pattern. I think you have investors who want to buy stocks, and the conditions are ripe for a rally, but so far we haven't been able to follow through," said Richard Cripps, chief market strategist for Legg Mason of Baltimore.

Cisco jumped $1.25 to $18.01, a 7.5 percent increase, in reaction to Chief Executive John Chamber's comments yesterday that orders for the first few weeks of the current quarter were in line with expectations.

Investors, starved for good news after weeks of dismal profits, layoffs and pessimistic outlooks, took the announcement as a sign the battered technology sector might be on its way to recovery.

IBM rose $4.11 to $107.11. Microsoft gained $2.88 to $62 on news it had taken a key step toward the release of its Windows XP in October and a judge had been assigned to decide how it should be punished for violating antitrust laws.

Buyers also gravitated toward blue chips. Home Depot rose $1.76 to $49.75, while General Electric advanced 83 cents to $41.87.

Analysts welcomed today's rally, but attributed much of the buying to an expected rebound after this summer's selloff. They said Wall Street is still getting mixed signals about the economy, and until that changes, the market will continue to struggle.

Most companies, particularly those in the tech sector, have been unable to predict when business will improve. The Federal Reserve has cut interest rates seven times this year, including a reduction earlier this week, but so far the steps have failed to stimulate growth.

Mostly weak economic data has been another reminder of the fragility, particularly in the tech sector that drove so much of the growth of the 1990s.

Still, Wall Street managed to shrug off a disappointing Commerce Department report today that showed a 0.6 drop in July orders for big-ticket manufactured goods, including those for new computers and high-tech products. Analysts attributed the reaction to the fact the data was a month old and didn't contain anything unexpected.