Tech Stocks Roar Back

A stampede of buyers into the technology sector sent the Nasdaq Composite skyrocketing to its biggest point gain ever Thursday and lifted broader indexes higher.

The Dow Jones Industrial Average soared 186.15 points, or 2.0 percent, to 9,363.46.

The Nasdaq catapulted 96.05 points, or 4.2 percent, to 2,405.55. It was the biggest percentage gain in nearly four months for the technology-heavy index. The Standard & Poor's 500 Index advanced 2.5 percent.

The rally took flight just minutes before Federal Reserve Chairman Alan Greenspan appeared before the House Banking Committee to speak about financial services reform. The fact that the Fed chief didn't address monetary policy was a signal to some that the Fed isn't leaning to a bias of higher interest rates.

Market bulls were encouraged by Thursday's rise in trading volume as well as the moderate pick-up in market breadth. New York Stock Exchange advancing issues led decliners by 1,754 to 1,202, while Big Board volume swelled 10 percent to 797 million shares.

Another positive sign was the ability of small- and mid-sized shares to keep pace with their larger cousins: the Russell 2000 Index of small-company stocks gained 2.1 percent.

In the bond market, Treasury issues leaned higher following the final leg of the Treasury Department's three-day sale of securities. The 30-year Treasury rose 8/32, to yield 5.362 percent.

Shares of brokerage company stocks surged . Merrill Lynch moved up 4 11/16 to 71 11/16 and Donaldson, Lufkin & Jenrette 2 15/16 to 50 15/16, Charles Schwab 4 to 67, E*Trade Group 5 1/2 to 48 1/4, and Morgan Stanley Dean Witter 7 7/16 to 92 1/8.

Among the companies in the news:

• Lycos (LCOS) rose 16 to 103 1/4 after Hambrecht & Quist upped its view of the shares to "strong buy"from "buy."
• CMGI (CMGI) rallied 19 15/16 to 112 after the big tech investor reportedly said it may reconsider its support for USA Networks' controversial acquisition of Lycos, fueling speculation the venture company may bend to the deal's critics. CMGI owns about 20 percent of Lycos shares.
• CNET (CNET) leaped 38 3/16 to 129 1/2 after the Internet media interest blew past most forecasts with its fourth-quarter operating net of 18 cents a share. A survey of analysts by First Call Corp. had shown a consensus projection of a dime. As well, CNET set a two-for-one stock split. Hambrecht & Quist analyst Daniel H. Rimer repeated his "buy" rating.
• SportsLine USA (SPLN) gained 5 1/4 to 40 1/8. The online publisher and CBS Corp. (CBS) announced a five-year extension of their initial five-year equity-for-promotion agreement. Under the terms of the extension, the agreement will run through Dec. 31, 2006. CBS Corp. holds a stake in MarketWatch.com Inc. Shares of CBS eased 1 1/16 to 36 1/2.
• Among other Internet stocks, America Online put on 13 5/8 to 164 1/2, Yahoo! 16 1/8 to 158 1/2, @Home 13 3/4 to 109 7/8, and Excite 15 3/8 to 105 1/4
• The semiconductor group caught fire. Linear Technology improved 6 to 101 after Far set a "strong buy" rating on the shares. Also, Texas Instruments appreciated 6 1/16 to 94 11/16, Xilinx 5 3/32 to 80 248/256, Teradyne 4 1/8 to 59, and Applied Materials 5 1/2 to 66 5/16.
• On the IPO front, Prodigy Communications (PRGY) bolted 13 1/8 to 28 1/8 after the Internet service provider priced 8 million shares at $15 each. That was the high end of its expected range. Web site publisher Vertical.Net (VERT) ran up 29 3/8 to 45 3/8 after pricing 3.5 million shares at $16 each. In another IPO, Gabelli Asset Management (GBL), headed by money manager Mario Gabelli, edged up 5/16 to 17 13/16 after pricing 6 million shares at $17.50 each. The expected pricing range was $16 to $19. But executive search entity Korn Ferry (KFY) fell 1 to 13 in its market bow. It priced 11.75 million shares at $14 apiece.
• Fingerhut (FHT) vaulted 5 9/16 to 24 3/8. Federated Dept. Stores (FD) will buy the direct marketer for $25 a share, or $1.7 billion. Bear Stearns hiked its opinion of Federated to "buy" from "attractive," noting that the stock trades at a 50 percent discount to the market's valuation. Bear pegs Federated's earnings growth at 13 percent to 15 percent in the next three years. Federated stock sagged 2 13/16 to 39 11/16.
• MCI WorldCom (WCOM) advanced 4 3/16 to 80 7/16. Fourth-quarter profits came to 23 cents a share, a penny more than most analysts polled by First Call Corp. had predicted. It earned a dime in the year-ago period.
• Separately, MCI WorldCom inked a 10-year agreement with information services company EDS (EDS) valued at $17 billion. Under the terms of the deal, MCI WorldCom will outsource major portions of its information technology services to EDS. EDS will assume responsibility for applications development and maintenance services and virtually all of MCI WorldCom's infrastructure services. In addition, EDS will outsource the bulk of its global network to MCI WorldCom. Shares of EDS gained 2 7/16 to 48 5/16.
• American International Group (AIG) rose 7 3/4 to 106 1/2. The insurer's operating profit totaled 94 cents a share in the fourth quarter, a penny above what most analysts had envisioned according to First Call Corp. The company's chairman made comments that some investors took to mean prices in the insurance business were flattening out after a weak period.
• Australia's News Corp. (NWS) tacked on 1 3/8 to 29 3/4. It netted fiscal second-quarter operating earnings of 34 cents a share, a penny more than the consensus Wall Street forecast per First Call Corp. It earned 41 cents in the year-earlier period. Revenue rose 15 percent.
• Philip Morris (MO) pulled back 5/8 to 40 13/16. A jury awared $50 million in punitive damages in the case of a Los Angeles woman who had contracted lung cancer and sued the company.