Technology stocks rebounded in a big way after Monday's pounding to regain their losses and then some, thanks to a combination of strength in dot-coms and end-of-month buying.
The rally was across the board and in every sector. The Dow Jones industrial average rallied 135.37, or 1.25 percent, to 10,971.14 while the Nasdaq Composite Index, shot up 178.23, or 5.58 percent, to 3,369.63. The Standard and Poor's 500 index gained 30.73, or 2.2 percent, to 1,429.39.
"Today was not a news-event day, it was more of a growing belief that the worst is over," said Charles Payne, principal analyst with Wall Street Strategies in New York. "If you look at yesterday's sessions, when Nasdaq was on its heels and could have gone further, it didn't go down. That's an extremely positive sign."
One thing that helped was that some consumer dot-coms are actually making money and might even turn a profit in a few years. Among the companies reporting improved quarterly financial results and smaller-than-expected losses were eToys (ETYS), Expedia (EXPE) and StarMedia Network (STRM).
"These companies are doing better than anyone expected, but the valuations have hurt them," Payne said. "People are still looking for a fair value for these companies. They still trade at pretty high multiples even at these levels."
Networking
This sector was hot again and back in favor. Juniper (JNPR) soared 28 5/8 to 195, Ciena (CIEN) jumped 14 7/16 to 105 1/8, JDS Uniphase (JDSU) jumped 10 1/16 to 81 3/8, Cisco (CSCO) recovered nicely to gain 5 13/16 to 53 7/8 and Corning (GLW) was up 5 1/2 to 76 1/2.
Semiconductors
The bloom was back on the chip sector's rose as well. PMC-Sierra (PMCS) soared 16 3/4 to 169 1/2, Broadcom (BRCM) jumped 9 9/16 to 222 3/8, Analog Devices (ADI) was up 4 15/16 to 65, Cypress Semiconductor (CY) gained 3 7/16 to 37 7/16 and AMD (AMD) was up 2 3/8 to 22 5/8. Rambus (RMBS) plunged 8 17/32 to 44 29/32 after a published report said Intel would greatly reduce its use of Rambus memory.
Consumer Internet
Yahoo (YHOO) led the way here, up 6 to 58 5/8, followed by Amazon (AMZN), which jumped 3 3/4 to 36 5/8, Expedia (EXPE) rose 3 11/16 to 12 3/4, eBay (EBAY) gained 2 1/4 to 51 1/2 and AOL (AOL) was up 2 3/4 to 50 1/2. Juno (JWEB) lost 11/32 to 2 21/32 and HearMe (HEAR) slipped 1/32 to 2 31/32.
Hardware
This sector also did extremely well, led by Sun (SUNW), which jumped 6 7/8 to 110 7/8, IBM (IBM) was up 5 3/16 to 98 1/2, VA Linux (LNUX) rose 4 3/8 to 29 1/4, Gateway (GTW) was up 1.01 to 51.61 and Hewlett-Packard (HWP) picked up 11/16 to 46 1/2. Palm (PALM) closed down 5/16 to 53 9/16.
Software
Adobe (ADBE) led the way, recovering from Monday's losses to gain 6 3/8 to 76. Intuit (INTU) was up 5 7/16 to 61 7/16, BroadVision (BVSN) was up 2 3/8 to 29 13/16, Electronic Arts (ERTS) gained 1 7/8 to 49 15/16 and Oracle (ORCL) closed up 1 3/8 to 33. Microsoft (MSFT) missed the party, closing down 3/16 to 68 7/8.
Communications
Nortel Networks (NT) jumped 5 1/2 to 45 1/2, Nokia (NOK) gained 3 1/16 to 42 3/4, Verizon (VZ) picked up 2 7/16 to 57 13/16 and AT&T (T) picked up 9/16 to 23 3/16. Qualcomm (QCOM) lost 3 1/16 to 65 1/16, MCI Worldcom (WCOM) was off 1 1/8 to 23 3/4 and Sprint (FON) fell 1 to 25 1/2.
