Wall Street Technology shares close at highs as Dell news sparks rally

SAN FRANCISCO (AFX) - Prices of technology shares closed at their highs for the day, after a broad rally that was sparked by Dell's confirmation it will meet its lowered first-quarter guidance, with strong gains in Yahoo helping to further boost the market after that stock surged on an upgrade, dealers said.	    The Nasdaq composite rallied nearly nine pct to close up 146.20 points at 1,785.00, after opening at 1,709.91.	    Volume came in at 2.32 bln shares, with advancers sharply outnumbering decliners, as 2,852 stocks gained, 868 fell and 569 remained unchanged. Upward volume was 2.18 bln shares, while down volume was limited to 87.21 mln shares.	    The Nasdaq 100 rallied closed up 148.30, or about 11 pct, at 1,519.05, while the Philadelphia semiconductor index (Sox) jumped almost 13 pct to close 59.20 higher at 522.69.	    Elsewhere, the DJIA added 402.63 points, or 4.23 pct, to 9,918.05 and the S&P 500 closed 48.19 points higher at 1,151.44.	    Prudential Securities market strategist Clark Yingst told AFX News that "it was an impressive day, but not a trend."	    "This certainly feels better than any rally we've had in a long time and even better than the rallies in January because those had an obvious catalyst -- Fed rate cuts."	    "If Dell was the catalyst for today's rally, it tells us how oversold the market was and how ripe the market is to rally on anything other than disastrous news," Yingst said, noting earlier widespread fears the PC marker will be forced to cut its earnings outlook again.	    Dealers said the market may have now reached an inflection point, adding there still remains a sizable amount of cash on the sidelines that is likely to enter the equities market.	    Yingst said moneyflows are "very encouraging," noting both block and non-block funds into companies like Texas Instruments, Micron Technology, and Applied Materials.	    "I'd argue the recent new lows on the Philadelphia semi index may be false and the positive divergence in the tech sector at least suggests the new lows might be false," he said.	    Dell rallied over 13.5 pct to close up 3 at 25-3/16, pulling along with it IBM, which closed up 6.21 usd at 98.21. HP surged 3.32 usd to 30.77, Compaq put on 1.36 usd to 17.16 and Gateway added 1.76 usd to 16.50.	    Apple closed 1.37 usd higher at 20.87. Wit SoundView analysts said the company is likely to miss its third-quarter guidance, while its second-quarter results are at "moderate" risk.	    Yahoo soared 22.61 pct on a Lehman Brothers upgrade of the stock to 'buy' from 'hold' with a 12-month price target of 20 usd. The Lehman anlayst said the stock has downside protection as a potential takeover target. Yahoo shares closed 2-13/16 higher at 15-1/4.	    News of an online digital music alliance, called Duet, with Vivendi's Universal Music, Sony Entertainment, and Bertelsmann's BMG helped boost sentiment towards Yahoo shares.	    eMusic rallied almost 60 pct to close up 1/8 at 11/32 after it said it is in talks to be acquired by a "major" media company. Dealers noted speculation that the company may be bought by Vivendi for the Duet alliance.	    eBay also posted a strong gain after ABN Amro analysts resumed coverage of the online auctioneer with an 'add' rating and said eBay is a "core holding" in the sector with "lower operating risk than most alternatives, particularly in the consumer sector."	    eBay shares rose 4-7/16 to 34-13/16 -- a gain of 14.61 pct.	    AOL Time Warner added 4.55 usd to 39.70. An AOL spokesman told AFX News that its instant messaging and other services were disrupted by a major power outage in Virginia.	    Agilent closed up 2.53 usd at 30.62. After the bell, Agilent warned on its upcoming second quarter and said it will start a 10-pct cut in salaries across the board from May 1 in a move it hopes to save the company some 70 mln usd a quarter. Agilent also said it will cut production to match slowing demand.	    JDS Uniphase managed a rally of almost 18 pct after Morgan Stanley analysts said they will buy the stock, even though the trimmed their 2001 and 2002 estimates on the company.	    Cisco closed up 1-1/4 at 14-15/16. Wells Fargo Van Kasper analysts cut their estimates and price target on the "broadening economic weakness on a global scale and the continued weeding-out of weak service providers and internet business models." The analysts, however, maintained their 'buy' rating.	    Microsoft benefited from a reiterated 'strong buy' rating by a Wit SoundView analyst, who called the company "a strong technology shelter in an uncertain technology market," adding it is poised for "strong" growth next year. The shares gained 4-13/16 to 56-3/4.	    Amongst semiconductors, Intel surged 13.26 pct to close up 3 at 25-5/8, Motorola gained 0.98 usd to 14.95 and Micron Technology surged 3.80 usd to 38.40. AMD climed 2.28 usd to 23.02, despite having its earnings estimates cut by Lehman Brothers on weakness in the flash market. Merrill Lynch also cut its intermediate rating on AMD and Micron.	    Corning was started at 'long-term attractive' by Robertson Stephens analysts in a bullish note. The shares closed up 1.74 usd at 20.74. 

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