NEW YORK (CNNfn) - Technology stocks soared in heavy trading Wednesday, pushing the Nasdaq composite index to its 13th record of the year as money poured into the economy's hottest chipmakers, telecommunications companies and biotechnology firms.
But the Dow Jones industrial average, home to many "old-economy" stocks, struggled to break even. Big jumps in SBC Communications, Intel and Microsoft barely offset losses in General Motors, Home Depot and 3M.
Explaining the divergence, analysts say money continues to chase technology while fleeing mutual funds investing in value stocks. The action helped propel the Nasdaq stock market to its busiest trading session on record.
"We still have a flood of money coming into technology at the expense of these old-economy stocks," Art Hogan, chief market strategist Jefferies & Company, told CNN's Street Sweep. "If you look at the sectors that make up the Nasdaq they are sectors that are the hottest in our economy."
 The Nasdaq surged 87.39 points, or almost 2 percent, to 4,784.08, its third record in five sessions. The Dow gained 9.62 points to 10,137.93, building slightly on a two-day advance that eased some of last week's big losses.
The broader S&P 500 rose 12.77 points, or almost 1 percent, to 1,379.19. And the Russell 2000 index of small companies gained 10.64 points to a record 588.35.
More stocks rose than fell. On the New York Stock Exchange winners topped losers 1,564 to 1,483. Volume rose to 1.26 billion shares, the second-highest volume on record. On Nasdaq, advancing issues beat decliners 2,418 to 1,854. A record 2.27 billion shares changed hands. 
In currency markets, the dollar fell sharply against the yen and edged lower versus the euro. Treasury securities fell.
Nasdaq resumes lead
Chipmakers, online brokers and biotech firms lifted the Nasdaq Wednesday.
"I think it's just more of the same," said Barry Hyman, chief market strategist at Ehrenkrantz King Nussbaum. "The Nasdaq is quickly approaching 5,000 and it's hard to divert money back to traditional stocks when the opportunities are so phenomenal in the new world economy."
Online broker E*Trade (EGRP: Research, Estimates) jumped 1-9/16 to 26-3/16, while rival Ameritrade (AMTD: Research, Estimates) surged 2-7/16 to 21-1/8. Intel (INTC: Research, Estimates), the No. 1 chipmaker, rose 2-7/8 to 115-7/8.
Biotech firm Chiron (CHIR: Research, Estimates) soared 15 to 65 and
Gene Logic (GLGC: Research, Estimates) rocketed 23-1/16 to 142-7/16.
3Com Corp. (COMS: Research, Estimates), Nasdaq's most active stock, climbed 6-1/8 to 104-1/8, continuing gains on enthusiasm over its spin-off of Palm Inc. Palm shares are expected to price late Wednesday, with trading to start Thursday. 3Com stock has risen sharply since the company said it would take public the Palm unit, maker of the popular PalmPilot electronic organizer.
Gains in Intel and Microsoft (MSFT: Research, Estimates), which rose 2-1/8 to 91-1/2, lifted the Dow.
So did SBC Communications (SBC: Research, Estimates), jumping 3-7/16 to 41-3/16 on news that it is in talks with Bell South (BLS: Research, Estimates) to merge their U.S. cell phone properties. Bell South rose 2-3/8 to 43.
"This is where the earnings growth is," said Donald Selkin, chief investment strategist at Joseph Gunnar, referring to tech stocks. "This is where people perceive the opportunities are to make money."
Still, Frank La Salla, CEO of BHF Securities, told CNNfn's market coverage that the gains won't continue if earnings for the first three months of 2000 disappoint. (248K WAV) (284K AIFF).
Non-technology companies limited the Dow's rise Wednesday. General Motors (GM: Research, Estimates) lost 1-13/16 to 74-1/4, 3M (MMM: Research, Estimates) fell 2-1/16 to 86-1/8, and Home Depot (HD: Research, Estimates) shed 1-1/2 to 56.
Tiffany posts earnings
Tiffany & Co. (TIF: Research, Estimates) gained 4-11/16 to 68-11/16 after the luxury retailer reported a 59 percent rise in quarterly net income to $84.6 million, or $1.11 a diluted share, beating estimates.
Casino operator Mirage Resorts Inc. (MIR: Research, Estimates) rose 3/16 to 15-15/16 after rejecting MGM Grand Inc.'s $3.4 billion takeover offer late Tuesday. MGM (MGM: Research, Estimates) gained 1/2 to 24-3/8.
Economic data
Stocks ignored the day's economic indicators, which showed surprising strength.
Manufacturing grew again in February as the National Association of Purchasing Management index rose to 56.9 from 56.3 in January. Analysts expected the NAPM index to remain unchanged.
Separately, spending on new construction jumped 2.7 percent in January, the government said, far above the 0.3 percent consensus of analysts.
The strong numbers may give Federal Reserve inflation fighters one more reason to raise interest rates next month. The Fed, the nation's central bank, has tightened credit four times since June, bringing its main lending rate to 5.75 percent. Stock investors fret that more rate hikes could hurt corporate profits by raising borrowing costs.
"The Fed is going to continue to tighten and what that's going to affect the most is the cyclical (stocks)," Harvey Hirschhorn, executive vice president at Stein Roe Farnham, told CNNfn.
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