NEW YORK (CNNfn) - Technology stocks took center stage Wednesday as investors renewed their love affair with the high-flying sector and proved particularly enamored of dot.coms and chipmakers.
A late-afternoon rally helped lift the tech-rich Nasdaq composite index to a new record close, as the blue-chips retreated on interest-rate concerns spurred by testimony that Federal Reserve Chairman Alan Greenspan gave before the U.S. Senate.
"It's more of the same," said Tony Dwyer, chief market strategist at Kirlin Holdings. "The money continues to flow into the momentum type of issues, into the Internets and biotech indexes. The money is still focused on the momentum shares that have done very well over the last few months."
The biggest Nasdaq mover Wednesday was computer network-equipment maker Cisco Systems (CSCO: Research, Estimates), which added 14-11/16, or 11.9 percent, to 138-5/8. The company on Wednesday said it would work with telecommunications equipment supplier Tekelec (TKLC: Research, Estimates) to help telephone companies move their voice traffic to next-generation networks.
The news sent Tekelec shares soaring even higher, rising 6-31/32 to 43-3/8, a 19.1 percent gain on the day and a new all-time high.
Analysts effective cheerleaders for Internets
Fueling the fire behind some dot.coms on Wednesday were accolades from an influential Wall Street analyst.
America Online (AOL: Research, Estimates), which is set to merge with CNNfn's parent Timer Warner (TWX: Research, Estimates), was boosted by Merrill Lynch analyst Henry Blodget, who issued a bullish report on the prospects of that merger. "AOL seems undervalued by almost any measure," Blodget said. "If any mega-merger of this size can work, this one can."
Shares of AOL ticked up 7-3/8, or 14.9 percent, to 57 in heavy-volume on the New York Stock Exchange.
Blodget also helped boost shares of online auctioneer eBay (EBAY: Research, Estimates), which ticked up 20-7/16 to 154-15/16, a 15.2 percent gain on the day. Blodget initiated coverage of the company Wednesday with a "buy" rating and a price target of $175, calling it a "core holding" and a "clear leader" in the Internet sector.
Other big dot.com winners Wednesday included Internet service provider Earthlink (ELNK: Research, Estimates), which added 4-1/8, or 19 percent, to 25-7/8; Internet incubator CMGI (CMGI: Research, Estimates), up 15-7/16 at 120-3/16, a 14.7 percent rise on the day; ISP PSInet (PSIX: Research, Estimates), which surged 9-1/4, or 23.9 percent, to 48; Internet domain-name registrar Network Solutions (NSOL: Research, Estimates), which finished up 36-5/8 at 299-13/16, a 13.9 percent rise; and online auctioneer UBid (UBID: Research, Estimates), which advanced 4-1/4, or 16.1 percent, to 30-5/8.
Among Wednesday's few dot.com decliners were Cybercash (CYCH: Research, Estimates), down 5/16 at 8-3/16; EarthWeb (EWBX: Research, Estimates), which slipped 1/2 to 29-1/4; and RealNetworks (RNWK: Research, Estimates), which fell 3/4 to 81-5/8.
Chips continue to shine
Semiconductor companies, which for the most part escaped a broad sell-off among tech stocks on Tuesday, continued their advances on Wednesday as well. The Philadelphia Stock Exchange's semiconductor index added 17.56 to 1007.49, a 1.8 percent rise on the day.
Microprocessor giant Intel (INTC: Research, Estimates) advanced 2-5/16 to 109-1/16, a 2.2 percent rise on the day. Meanwhile, Intel rival Advanced Micro Devices (AMD: Research, Estimates) slid 3/4 to 41-1/16, a 1.8 percent decline.
Makers of analog semiconductors, which are used to convert real world signals such as images and sound into a digital format, ended the session broadly higher.
Analog Devices (ADI: Research, Estimates) shares ticked up 3-15/16, or 2.7 percent, to 147-5/8. Maxim (MXIM: Research, Estimates) added 2-15/16 to 57-7/8, a 5.4 percent rise on the day. Micrel (MCRL: Research, Estimates) shares rose 5-7/16, or 6 percent, to 95-17/32. National Semiconductor (NSM: Research, Estimates) shares added 3-7/16 to 67-5/8, a 5.4 percent rise on the day.
LSI Logic (LSI: Research, Estimates) shares rose 4-1/2 to 59. Warburg Dillon Read analyst Gregory Mischou on Wednesday boosted his rating on LSI to "strong buy" from "buy" and upped the price target to $90 from $60.
Mischou said that despite a recent strong move to the upside, LSI is undervalued considering its position in several high-growth communications end markets. He also said LSI expects communications revenue to grow 60 percent year-over-year in 2000 and will account for 50 percent of total sales.
Meanwhile, Rambus (RMBS: Research, Estimates), which makes money by licensing the technology used to speed computer memory performance, slipped 1-9/16 to 177, after reaching an intraday high of 203-1/16.
Gateway boosted by Bear Stearns bull
Bullish analyst comments also helped to lift the computer equipment segment Wednesday.
Ahead of its analyst meeting in San Diego on Wednesday, Gateway (GTW: Research, Estimates) earned a nod of approval from Andrew Neff at Bear Stearns, who maintained his "attractive" rating on the PC-maker. Neff said he expected the company to reaffirm efforts to boost customers and markets.
"We think the company has multiple engines of growth coupled with better execution against the goals of diversifying its revenue streams," Neff said.
Gateway shares rose 10-7/16, or 18.25 percent, on Wednesday, ending the session at 67-5/8.
Dell Computer (DELL: Research, Estimates) also headed higher Wednesday, ending the session up 1-9/16 at 41-3/8, a 3.9 percent rise on the day. Shares of Apple Computer (AAPL: Research, Estimates) rose 2-7/16, or 2.1 percent, to 116-1/4. Hewlett-Packard (HWP: Research, Estimates) added 2-3/4 to 130-3/4, a 2.2 percent gain on the day.
PC makers heading lower Wednesday included Compaq (CPQ: Research, Estimates), down 1/16 at 25-3/16; and IBM, which slid 2-1/4 to 108-3/4, a 2 percent decline on the day.
The Goldman Sachs computer hardware index ended the session up 18.59 at 548.25, a 3.5 percent rise on the day.
Nextel Partners IPO soars; other wireless companies follow
Making its debut on Wall Street Wednesday was Nextel Partners (NXTP: Research, Estimates), the U.S. affiliate of Nextel Communications (NXTL: Research, Estimates).
Nextel Partners shares ended their first day of trade up 10-1/8 at 30-1/8, a 50.6 percent gain. Meanwhile, Nextel Communications shared added 2-3/4 to 133-3/4, a 2.1 percent rise on the day.
Other wireless communications outfits heading higher Wednesday included Sprint PCS (PCS: Research, Estimates), up 1-1/2 at 46, a 3.4 percent gain on the day; Winstar Communications (WCII: Research, Estimates), up 2-1/2, or 3.4 percent, at 75-7/8; US Cellular (USM: Research, Estimates), which ticked up 1-5/8 to 64-3/8, a 2.6 percent gain; and Western Wireless (WWCA: Research, Estimates), up 13/16, or 1.8 percent, at 46-15/16.
Wireless companies heading lower Wednesday included Alltel (AT: Research, Estimates), which slipped 1-1/4 to 59-3/4, a 2 percent decline; and CenturyTel (CTL: Research, Estimates), which fell 7/16, or 1.2 percent, to 34-15/16. 
-- from staff and wire reports
|
