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Wall St. charges ahead
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December 4, 2001: 5:16 p.m. ET
U.S. stocks rise on chip, networking strength, easing of war concerns.
By Staff Writer Alexandra Twin
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NEW YORK (CNN/Money) - U.S. stocks surged Tuesday, as early volatility surrounding global safety concerns gave way to a blue-chip buying spree on the Dow Jones industrial average and a chip-led rally on the Nasdaq composite, which added more than 3 percent.
The Nasdaq composite rose 58.20 to 1,963.10. The Dow Jones industrial average gained 129.88 to 9,893.84, while the Standard & Poor's 500 added 14.90 to 1,144.80.
Guiding the techs higher, UBS Warburg said the semiconductor equipment sector is near a bottom and that Novellus Systems (NVLS: up $4.24 to $41.70, Research, Estimates) and Varian Semiconductor (VSEA: up $4.23 to $35.41, Research, Estimates) are among the strongest names in the sector.
Cisco Systems (CSCO: up $0.66 to $20.52, Research, Estimates) gave the networking issues an extra boost after CEO John Chambers, speaking at the company's analysts conference, said November orders met expectations.
But the positive corporate news was countered by continued global political unease.
Israel fired rockets at a building next to where Palestinian leader Yassir Arafat was stationed. The attacks were the latest in response to a series of weekend bombings that killed at least 25 people in Israel.
Separately, on Monday, U.S. Homeland Security Director Tom Ridge issued a new security alert, warning that another terrorist attack within the United States was possible.
However, analysts note that investors and the market as a whole seem to be showing more resilience of late in the face of the ongoing political and military developments.
Al Goldman, chief market strategist at A.G. Edwards, told CNNfn's Halftime Report that investors and consumers are in recovery mode and that the fact that we have paused for the last seven or eight sessions was a good sign. Come mid-December, "We're well-prepared for a Santa Claus rally." (508K AIFF) (508K WAV)
Asian markets closed higher, despite weakness in the financial sector, and European markets closed higher.
Treasury prices edged higher, with the 10-year note yield down to 4.66 percent. The dollar was little changed versus the yen and the euro. Light crude oil futures fell 39 cents to $19.65 a barrel in New York.
Market breadth was positive. On the New York Stock Exchange, advancers topped decliners 7-to-3 as nearly 1.3 billion shares traded. On the Nasdaq, winners beat losers by an almost 2-to-1 margin as 1.89 billion shares changed hands.
Intel, Enron among actives
The UBS Warburg upgrade, in conjunction with a price target upgrade of tech leader and No. 1 chipmaker Intel gave a double booster shot to the often highly tumultuous semiconductor sector.
"We think the chip sector has bottomed and the chip-equipment sector will bottom this month," Byron Walker, the chip analyst at UBS Warburg who made the call, told CNNfn's Market Call. (453K AIFF) (453K WAV)
UBS Warburg also upped its 12-month price target on the No. 1 chipmaker Intel (INTC: up $0.82 to $32.86, Research, Estimates) to $36 from $29.
Microsoft (MSFT: up $1.23 to $66.00, Research, Estimates) will indirectly enter the bidding war for AT&T's (T: up $0.15 to $17.59, Research, Estimates) cable television unit, according to the Wall Street Journal. The software maker will help finance two rivals hoping to block AOL Time Warner (AOL: up $1.17 to $34.75, Research, Estimates), parent of CNN/Money.com, from grabbing it.
Automation software maker Synopsys (SNPS: down $2.36 to $53.03, Research, Estimates) will buy software products developer Avant! (AVNT: up $6.90 to $17.85, Research, Estimates) for about $769 million in stock.
Troubled energy trader Enron (ENE: up $0.47 to $0.87, Research, Estimates) got a bankruptcy court OK for $1.5 billion in debtor-in-possession financing backed by a bank group including J.P. Morgan (JPM: up $0.67 to $37.22, Research, Estimates) and Citigroup (C: up $0.92 to $47.83, Research, Estimates).
Merrill Lynch added Dow retailer Home Depot (HD: up $1.31 to $47.70, Research, Estimates) to its "focus list," and Lehman Bros. said General Electric (GE: up $0.43 to $37.35, Research, Estimates) is a "buy" despite its recent troubles and because the company has no exposure to Enron.
IBM (IBM: up $2.51 to $116.64, Research, Estimates), United Technologies (UTX: up $2.00 to $60.91, Research, Estimates) and 3M (MMM: up $2.56 to $116.43, Research, Estimates) also gave the Dow legs. 
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