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Techs build on gains
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September 10, 1999: 4:52 p.m. ET
Indications of low price pressure enough to push Nasdaq higher
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NEW YORK (CNNfn) - Taking their cue from indications of low price pressures in the economy, technology investors bid up stocks on Friday, building on earlier gains.
The Nasdaq composite index, a technology-heavy barometer of the market's activity, rose 34.94 to a record 2886.96 in a session that saw uncertainty early but then began a steady climb for the rest of the day.
Helping to steady the Nasdaq's direction was the August producer price index report from the U.S. Labor Department Friday morning.
The PPI, which measures prices of goods before they reach consumers, rose 0.5 percent during the month, slightly higher than the 0.3 percent gain predicted by Wall Street economists.
However, the core rate, which ignores the volatile food and energy components, decreased 0.1 percent.
The core rate is often more closely watched by the market, and since Friday's report indicated lower inflationary pressures, it gave the market hope that the Federal Reserve would use it as a sign that inflationary pressures are not strong.
Tech stocks are particularly sensitive to interest rate hikes because these firms often borrow money to grow, and any sign of a possible rate hike would hurt their bottom lines.
Investors will turn their attention next week to the consumer price index report for further direction.
For now, said Bryan Piskorowski, market analyst at Prudential, technology investors will play a "wait and see" game until the CPI and the October Fed meeting.
"There is still fear of the Fed out there and we're not going to have that resolved until we get through October," he said. "They're just going to sit around and pine about what the Fed is going to do."
As the most interest rate sensitive issues, Internet stocks got the biggest bounce from the market's tech enthusiasm.
Online auctioneer eBay (EBAY) leapt 13-9/16 to 158 in the wake of the PPI report, adding onto gains from Thursday when the company got upgrades from several Wall Street analysts.
On Friday, more good news for eBay when Wachovia Securities started the company's stock with a "long-term buy" rating, calling it a must-own stock in the current e-business climate. Additionally, it cited eBay's strength as a Web brand name.
Following up closely behind was portal company Yahoo! (YHOO), rising 7-13/16 to 170-1/2. On Friday, Showtimes.com, a division of Big Entertainment, agreed to deliver movie show times to handheld and wireless devices with Yahoo! Mobile.
Shares of America Online (AOL) were up as well, but less so, rising 1/8 to 96-3/8. On Friday, chief technology officer Marc Andreesen announced he would take a part-time advisory role with the company.
Andreesen, the co-founder of Netscape Communications, came to AOL in February after the online service acquired Netscape. The company said Andreesen will go back to dealing with start-up firms whose technology can benefit AOL.
Andreesen will be replaced as chief technology officer by William Raduchel, who most recently was chief strategy officer at Sun Microsystems, planning the company's long-term strategy. Sun (SUNW) shares gained 1-1/2 to 85-11/16 Friday.
Shares of National Semiconductor (NSM) were solidly higher, up 2-3/4 to 34-3/4, after the company announced late Thursday that it had returned to profitability.
National Semiconductor had net income of $47.1 million, or 25 cents a share, in the first quarter of its fiscal 2000. Excluding one-time gains, it earned 1 cent per share, besting Wall Street estimates of a loss of 14 cents per share.
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