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Nasdaq Shatters 4,000 Mark

The Nasdaq handily broke through the 4,000 level on Wednesday in a late rally for a record close -- the tech-heavy index has gained 1,000 points in the past two months.

If there's any mascot for the late December rally, Qualcomm would be it. The stock's been a big perfomer for the year and was a huge, 31 percent gainer on Wednesday on an analyst's moon shot $1,000 price target.

The strong close for the markets -- the Dow Jones Industrial Average also hit a record 11,484.66, up 7.95 points -- sends a technical signal for a near-term move higher, said Donald Selkin, chief equity strategist at Joseph Gunnar.

More inflation-friendly news on Wednesday added fuel to an already buoyant mood. The market's showing more breadth than it has of late, another healthy sign. The Russell 2000 Index of small-capitalization stocks rose 1.7 percent, setting a record itself.

The Nasdaq Composite rose 68.92 points, or 1.7 percent, to 4041.43. The Dow Industrials rose 0.1 percent.

Meanwhile, government bonds rallied strongly in afternoon trading as the full impact of the Federal Reserve's s pump-priming hit home. The Fed is determined to flood the system with cash to forestall any potential Y2K disruptions.

All that loose cash boosted prices all along the yield curve.

The tech-heavy Nasdaq is now up over 81 percent for the year, with recent buying coming from fund managers eager to lock onto the big gainers before the books close on 1999.

Rising tech stocks on the Nasdaq may have been behind some of the non-Nasdaq tech gainers, like Hewlett-Packard spin-off Agilent Technologies, which jumped 7 5/8 to 69 1/8, on no apparent news

Some analysts said the stock was rising on strong retail buying, and perhaps some short-covering. Company officials confirmed that they have not issued new guidance on profits to the analysts, and said they had no known reason for the stock's rise over the past two days.

Internet issues powered the Nasdaq higher. The Goldman Sachs Internet Index added 3.3 percent,breaking four straight days of losses. Financials were among the leading sectors, and technology stocks, like the semiconductor stocks rebounded nicely.

"Those stocks were down for all of two days in a row, and now you're getting normal, end-of-the-quarter window dressing. It's back to the momentum stocks," said Al Goldman, chief strategist at A.G. Edwards.

"We're continuing to see money flowing into the winners," said James Herrick, director of equity trading at Robert Baird.

Among the losers, retail stocks were off 1.5 percent, cutting gains from earlier this week. Utilities and pharmaceuticals also provided the rare spots of red among the sectors.

Price target-happy analysts boosted the fortunes of Qualcomm and DoubleClick , helping set the holiday tone for the markets from the start on Wednesday.

Qualcomm rose 156 points to 659 after PaineWebber initiated coverage of the developer of CDMA technology with a "buy" rating nd a 12-month price target of $1000. "Panic" short-selling from investors who decided to short the stock against its recent high may have also contributed to the increase, according to Selkin. The stock's 4-for-1 split is effective Dec. 30.

Online brokers gained on a rosy report from discounter Charles Schwab - the largest online broker. Schwab, which soared 5 5/8, 16.4 percent, to 39 15/16, told investors it expects to report fourth-quarter net income of $162.

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