NEW YORK (CNN/Money) -
Technology stocks helped propel the Nasdaq composite to a new two-year high Tuesday, as a solid sector performance helped the Nasdaq distinguish itself from more lackluster results by the Dow and the S&P 500.
According to preliminary reports, the Nasdaq composite ended 10.01 points, or 0.6 percent, higher to 2,057.37, its highest level since January 8, 2002.
Sirius Satellite Radio (SIRI: Research, Estimates) shares briefly topped the Nasdaq most active list amid speculation Clear Channel Communications may be looking to take a stake in the subscription radio firm.
But by the end of the trading day, its shares pulled back 4 percent to $3.36 on Nasdaq.
Rival XM Satellite (XSMR: Research, Estimates), which also trades on the Nasdaq, ended the day 6.7 percent higher to $28.97.
Gateway (GTW: Research, Estimates) shares stumbled 12.85 percent to $4.83 on the New York Stock Exchange after the company late Monday warned its fourth-quarter revenue would miss its previous estimates.
Poway, Calif.-based Gateway now sees revenue of about $880 million, down from its previous forecast of $925 million to $975 million.
Bear Stearns Tuesday cut its rating on the PC maker's shares to "underperform" from "peer perform," while Soundview Technology lowered its rating on the shares to "neutral" from "outperform."
Shares of Sun Microsystems Inc. (SUNW: Research, Estimates) rose more than 7 percent to $5.03 on Nasdaq after a Merrill Lynch analyst who had made negative comments about the computer maker raised his fourth-quarter revenue target.
Analyst Steven Milunovich, who in October had called on Sun management to cut jobs and overhaul their strategy, now expects the networking infrastructure firm to report revenue of $2.85 billion.
The new estimate bests his previous estimate of $2.74 billion and is above Wall Street's $2.76 billion average estimate, as polled by Reuters Research. He also sees a quarterly loss of 3 cents per share, 1 penny smaller than he had anticipated, compared with Reuters Research estimates for a loss of 5 cents.
Milunovich maintained his "neutral" rating on the shares, saying that Sun still suffers from competition from International Business Machines Corp. in its most expensive computers and by Dell Inc. (DELL: Research, Estimates) in less expensive computers.
IBM, meanwhile, snared an order from a major customer of Taiwan Semiconductor Manufacturing Co. (TSM: Research, Estimates) by winning a contract to make computer processors for chip designer VIA Technologies Inc.
VIA President Wenchi Chen said the company chose IBM because of its lead in silicon-on-insulator (SOI) technology, which helps to conserve power consumption in tiny circuits by reducing electricity leakage.
IBM (IBM: Research, Estimates) shares rose fractionally higher to $93.06 on the New York Stock Exchange.
--from staff and wire reports
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