Technology stocks shot higher in the US overnight, as investors bet that the economic downturn is bottoming out.
"Money seems to be moving into big tech," said Tim Ghriskey, senior portfolio manager with mutual fund firm Dreyfus.
The Nasdaq composite index rose 106.70 to 2,305.58. The Dow Jones industrial average rose 36.18 to 11,337.92.
"The expectation is CEOs of tech companies are going to start whistling a different tune, saying business is dismal but not as dismal. That gives investors light at the end of the tunnel that the profit recession is going to end," said Hugh Johnson, chief investment officer at brokerage First Albany. "In the early stages of a bull market, tech stocks do well. When you are about to come out of a profit recession, tech stocks do well."
Several widely held technology bellwethers surged, including Cisco Systems, up US$2.67 to US$22.87, Sun Microsystems, up US$2.99 to US$22.96, and Oracle, up US$1.82 to US$18.10.
On the New York Stock Exchange, technology gainers included Nortel Networks, Corning, and Texas Instruments.
Intel increased US$1.14 to US$29.90 despite a downgrade from analyst Joe Osha of Merrill Lynch. Osha cut ratings on Intel and Advanced Micro Devices, saying the continuing depression in the PC market could hurt both companies. AMD gained US$1.90 to US$34.39.
Shares of Palm surged 89 cents to US$5.94 as one analyst upgraded the stock and called it a bargain. The maker of handheld devices lost 28 percent Friday after it warned of weak sales. Competitor Handspring was up 77 cents to US$9.46.
Online brokerage E*Trade rose 80 cents to US$10 after announcing it agreed to buy Internet brokerage Web Street, up 68 cents to US$1.48, for US$45 million in stock. E*Trade will pick up 34,000 new accounts in the deal.
Staff and Reuters contributed to this report.
