NEW YORK (CNNfn) - Positive guidance from leading chip maker Intel sent the Nasdaq composite index soaring nearly 100 points Thursday, as investors regained confidence in the tech sector.
"The ability of Intel to come out and say a 'no worse than expected' story pleased the market. There are many other corporations in technology that are in that position so that if the slowdown is just a slowdown, there's good upside in many of those issues," said Barry Hyman, chief investment strategist at Weatherly Securities.
 A good portion of the money pouring back into the tech sector also came from mutual fund managers, who had sold tech stocks to offset capital gains before closing their books at the end of October.
The Nasdaq surged 95.63 points, or nearly 3 percent, to 3,429.02.
But the Dow Jones industrial average flip-flopped, as buying in Intel and financial issues was tempered by selling in Exxon Mobil and drug stocks. The Dow slipped 18.96 to 10,880.51, while the S&P 500 gained 7.10 to 1,428.32.
Now that most of the major companies have reported quarterly results, investors have been quick to react to corporate and economic news,  regardless of whether it's good or bad. All eyes will be watching the unemployment rate for October, which will be reported Friday before the market opens.
"It (economic data) seems like a yo-yo – one thing says the economy is slowing and one thing says the economy is on track, one helps inflation fears and one helps earnings," said Peter Coolidge, senior trader with Brean Murray & Co. "We're still in the midst of a jittery market but it's a very fast moving market with a lot of volatility."
Brian Finnerty, head of Nasdaq stock trading at C.E. Unterberg Towbin, agreed that the volatility will continue, telling CNNfn's market coverage that the Nasdaq bottomed in October but investors should expect choppy trading ahead. (411K WAV) (411K AIFF).
Market breadth was positive. Advancers beat decliners on the New York Stock Exchange 1,606 to 1,132, as more than 1.1 billion shares changed hands. On the Nasdaq, winners topped losers 2,504 to 1,453, as more than 2.2 billion shares were traded.
In other markets, Treasurys rose. The dollar was little changed against both the euro and the yen.
Upbeat Intel powers tech buying
Intel took the lead from the start with positive guidance painting a positive picture for the whole tech sector.
"Intel has signaled that things are on track and that has calmed a lot of fears. In this tough environment, that's enough for the tech market to take a cue from and rally," said Brean Murray's Coolidge.
Top executives from leading chip maker Intel (INTC: Research, Estimates) told analysts and reporters Wednesday evening that the company is on track to post 4-to-8 percent revenue growth in the fourth quarter, and they are targeting growth on a percentage basis in the "high-teens" for 2001. Intel's shares jumped $1.81 to $46.69.
Analysts were pleased with Intel's guidance.
Merrill Lynch reiterated its "accumulate" rating on Intel and Lehman Brothers reiterated its "buy" rating for the chip maker, saying it was pleasantly surprised that Intel saw decent sales in Europe and Asia.
Click here for more analyst comments
"Some positive news out of Intel is driving that space and people are reinvigorated about tech and telecom," said Art Hogan, chief market analyst at Jefferies & Co. Explaining the Dow's struggle, he said, "The money that left tech and telecom to hide in that harbor of safety in the Dow is now going into the Nasdaq."
 Intel's gains spilled into the semiconductor and internet sectors. Xilinx (XLNX: Research, Estimates) advanced $2.31 to $69.75, Amazon.com (AMZN: Research, Estimates) jumped $2.38 to $39.75 and eBay (EBAY: Research, Estimates) gained $3.41 to $57.44
Lending further support to the semiconductor sector, the Semiconductor Industry Association said global semiconductor sales are expected to rise 37 percent this year to a record $205 billion, and will reach $319 billion by 2003.
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Investors will also be eyeing Qualcomm, which reports its quarterly results after the closing bell. The company also announced it would delay the initial stock offering of its Spinco unit until January, citing poor market conditions.
Qualcomm (QCOM: Research, Estimates) shares gained $1.31 to $62.81.
But not all tech stocks attracted buyers. For the second straight session, WorldCom (WCOM: Research, Estimates) lost $1.38. to $17.56 after Bernard Ebbers, chief executive officer of the No. 2 U.S. long-distance company, told CNNfn Thursday that his company was shifting its growth model away from trying to land a big-name acquisition to focusing on internal growth and adding smaller acquisitions to supplement its operations.
 In addition to Intel, financial issues helped boost the Dow. Citigroup (C: Research, Estimates) gained $1.38 to $53.06.
But selling in Exxon Mobil (XOM: Research, Estimates), and in drug issues Johnson & Johnson (JNJ: Research, Estimates) and Merck (MRK: Research, Estimates), tempered the gains.
Exxon shed $3.88 to $88.19, JNJ lost $1.13 to $89.88, and Merck dropped 63 cents to $89.13
Watching the economy and election
After six interest rate hikes since June 1999, most of the incoming economic data have been pointing to a slowing economy, helping calm skittish investors.
In the day's economic news, the productivity of U.S. workers -- a key measure of worker output per hour -- grew 3.8 percent in the third quarter, the government said Thursday. That was a shade above Wall Street forecasts but well below the second quarter's rate of increase.
Labor costs, closely watched for signs of inflation, rose a bigger-than-expected 2.5 percent after edging lower the previous quarter.
The data were somewhat dismissed by the market. Federal Reserve Chairman Alan Greenspan has consistently said productivity must remain high for inflation to stay under control.
Investors were also considering the national presidential election, which takes place in four days. The latest CNN/USA Today/Gallup three-day tracking poll shows Texas Gov. George W. Bush's lead over Vice President Al Gore at 5 percentage points, 48-43. 
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