NEW YORK (CNN/Money) -
Technology recovered a bit from last week's sharp selloff that ended in the Nasdaq's biggest weekly drop in two years, but stocks weakened midday as investors remained cautious ahead of Tuesday's Federal Reserve policy setting meeting.
The Nasdaq composite index gained 18.6 points, or 0.9 percent, to close at 1,938.72 and the AMEX Technology index gained 0.7 percent.
"Right now, I can't see anything more to these gains than a technical bounce," Robert Mikkelsen, senior managing director of equity capital markets at The Advest Group, told Reuters.
Volume leader Cisco Systems (CSCO: Research, Estimates) pushed the Nasdaq higher, up 1 percent at $21.12. Fellow network company JDS Uniphase (JDSU: unchanged at $3.09, Research, Estimates) gained 2 percent.
Shares in Microsoft Corp., (MSFT: Research, Estimates) the world's largest software firm, edged up 0.8 percent. The company said sales of Windows XP have grown to more than 210 million copies since the product was launched two and a half years ago and unveiled the newest version of its anti-piracy software for digital files, music and movies.
In other Microsoft news, company chairman and world's richest man Bill Gates was fined $800,000 by the federal government, which said that he violated an antitrust waiting period for stock purchases.
Rival software firm Oracle Corp. (ORCL: Research, Estimates) ended the day up 0.7 percent.
Networking companies were also NYSE volume leaders, with Nortel Networks (NT: Research, Estimates) plummeting 9.6 percent and Lucent Technologies (LU: Research, Estimates) down 2.1 percent.
Network storage company EMC Corp. (EMC: Research, Estimates) rose 1.4 percent and Motorola Inc. (MOT: down $0.03 to $18.22, Research, Estimates) edged lower 0.2 percent.
Worldgate Communications (WGAT: Research, Estimates) soared after the company announced a deal under which Motorola will market the video phone maker's Ojo personal video phone as part of a portfolio of broadband products. Worldgate also said that it will market more broadband video telephony products with Motorola in the future. Shares of Worldgate shot up 49.4 percent.
Dow component Boeing (BA: Research, Estimates) gained 2.1 percent after the company announced that it will raise its quarterly dividend by almost 18 percent and resume a share buyback program.
IBM (IBM: Research, Estimates) announced that global financing chief Mark Loughridge will replace CFO John Joyce, effective immediately. Shares edged lower 0.2 percent on the news.
A new PC worm called Sasser, which exploits flaws in Windows 2000 and XP editions, has struck hundreds of thousands of computers worldwide, pushing up shares in online-security software companies.
Network security company Symantec Corp. (SYMC: up $1.90 to $47.03, Research, Estimates) soared 4.4 percent at $47.03, and Network Associates, owner of McAfee anti-virus software, edged up 0.9 percent.
Computer security systems provider Magal Security Systems Ltd. (MAGS: unchanged at $12.80, Research, Estimates) announced that its first-quarter net income jumped 29 percent on sales that rose by 11 percent, but shares ended flat.
Semiconductors gained in morning trade but retreated at the end of the day on a report from the European Semiconductor Industry Association saying that March chip sales rose 32 percent from a year earlier on demand for communication devices.
The report pointed to growing tech sector strength and a recovery for the chip industry, but the Philadelphia Semiconductor slid 2.61 points to 440.87, losing 0.6 percent. Companies in the sector ended the day mixed.
Major semiconductor Intel Corp. (INTC: up $0.30 to $26.04, Research, Estimates) rose 1.2 percent at $26.04 and KLA-Tencor (KLAC: Research, Estimates) rose 0.6 percent.
Chip manufacturer Advanced Micro Devices (AMD: Research, Estimates) ended flat.
Chip and chip gear makers that fell included Applied Materials, (AMAT: Research, Estimates) down 0.8 percent, and Broadcom Corp. (BRCM: down $0.20 to $37.61, Research, Estimates), down 0.6 percent.
Adobe Systems (ADBE: up $2.50 to $44.00, Research, Estimates) surged nearly 7 percent in morning trade after the software maker boosted its quarterly sales and earnings forecast because of better-than-expected demand for its products, ending the day up 6 percent at $44.00.
After meeting first-quarter earnings and revenue estimates, Israeli Internet management company Radware (RDWR: Research, Estimates) dropped on weak guidance for its upcoming second quarter. Shares fell 29.2 percent.
On its earnings conference call Monday, the company said it expects to earn 15 cents per share on revenue of $16 million in the second quarter, but analysts polled by Thomson First Call were looking for 16 cents per share on revenue of $16.54 million.
Internet business conglomerate InterActiveCorp (IACI: Research, Estimates) on Monday announced better-than-expected quarterly profit, but concerns about rising marketing costs necessary to fend off competition at its travel unit pushed stock down 3.7 percent at the end of the day.
New York-based IAC's businesses include Expedia and Hotels.com.
After a negative Barron's Magazine calling the company's P/E ratio "absurd," shares in stun-gun maker Taser International (TASR: down $1.00 to $31.28, Research, Estimates) dropped 3.3 percent at $31.28.
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