NEW YORK (CNNfn) - Technology stocks continued to soar Tuesday as market-friendly economic data sparked a rally that sent Internet and telecommunications issues much higher.
The tech-rich Nasdaq composite index, which remained well above its opening level throughout the day, finished the session 106 higher at 4,427.77, a 2.45 percent advance on the day.
Helping to fuel Tuesday's market was the release of fourth-quarter worker productivity data that market observers said suggests inflation remains in check.
That was enough to kick-start buying in the broader markets -- where the Dow Jones industrial average ended up 51.81 at 10.957.6, and the S&P 500 finished 17.51 higher at 1,441.75 -- and helped the tech sector to continue its solid advances.
"I think the productivity numbers you saw this morning lessen the fears in the marketplace about the Fed raising rates," said Francis Gannon, a portfolio manager at SunAmerica Asset Management.
"Technology is part of the increasing productivity trend, and people want to own shares in the companies that mark this trend," Gannon added.
Internet stocks lead the charge
Dot.coms were on the rise Tuesday, leading the Dow Jones composite Internet index up 13.21 to 419.64, a 3.25 percent rise on the day.
Shares of Web portal Yahoo! ticked up 19-1/2 to 373-1/2, a 5.5 percent gain, investors apparently unfazed by the three-hour outage that rendered much of Yahoo!'s service inaccessible on Monday.
Newcomer Buy.com (BUYX: Research, Estimates), an online retailer that made its debut on Nasdaq Tuesday, also posted a strong showing. After being priced at 13, Buy.com shares surged more than 93 percent, finishing up 12-1/8 at 25-1/8.
Online retailing giant Amazon.com (AMZN: Research, Estimates) also posted a sharp gain Tuesday, ticking up 8-1/8, or 10.8 percent, to 83-1/8. That gain came even after the company said that it and its Alexa Internet software subsidiary face two privacy invasion lawsuits and an "informal inquiry" by the Federal Trade Commission. The suits allege that Alexa secretly intercepted electronic communications and other personal data with its software and sent the information to third parties, including Amazon.
Shares of online auctioneer eBay (EBAY: Research, Estimates) also advanced in spite a lawsuit that rival Internet auction company Bidder's Edge filed against it this week as well. eBay added 3/16 to 169-3/4.
Consumer e-commerce companies heading down on Tuesday included: online software vendor Beyond.com (BYND: Research, Estimates), down 3/16 at 5-7/16, a 3.3 percent slide; eToys (ETYS: Research, Estimates), which ticked down 5/16, or 16-1/2, at 16-1/2; and Barnes & Noble.com (BNBN: Research, Estimates), which slipped 9/16 to 11-1/8.
Business-to-business Internet companies were mixed.
Shares of FreeMarkets (FMKT: Research, Estimates) added 7-5/8, or 3.2 percent to 247. Internet Capital Group (ICGE: Research, Estimates) advanced 1-3/4 to 126-7/8, a 1.4 percent advance.
Heading lower were: Razorfish (RAZF: Research, Estimates), which ticked down 7/16 to 46-3/16; Ariba (ARBA: Research, Estimates), off 6-3/8 at 188-1/4, a 3.3 percent slide; and OpenMarkets (OMKT: Research, Estimates), which slipped 5/8 to 50-13/16.
Telecoms also edge mostly higher
Telecommunications stocks also ticked largely higher Tuesday, sending the Nasdaq telecommunications index up 39.61 to 1,101.91.
MCI/Worldcom (WCOM: Research, Estimates), one of the day's biggest Nasdaq movers, added 2-15/16, or 6.1 percent, to 50-15/16. The company is expected to post its fourth-quarter earnings results after Tuesday's closing bell.
Shares of Cable & Wireless (CWP: Research, Estimates), which trades on the New York Stock Exchange, ticked up 3-15/16 to 65-1/8, a 6.4 percent rise on the day. SBC Communications (SBC: Research, Estimates) advanced 7/16 to 42-5/16, a 1 percent rise on the day.
On the downside, shares of Network Access Solutions (NASC: Research, Estimates), which sells the telecommunications equipment used to build, maintain and secure computer networks, fell 1-5/8, or 4.6 percent, to 33-1/2. The company on Monday inked a deal with SBC Communications and Mexico's Telefonos de Mexico (TMX: Research, Estimates), or Telmex, under which SBC and Telmex will invest $150 million to help fund Network Access' network expansion. In return, Network Access' agreed to provide its service to customers of SBC and Telmex.
Also heading lower Tuesday were: AT&T (T: Research, Estimates), off 7/8 at 50-3/8, a 1.7 percent slide; Bell Atlantic (BEL: Research, Estimates), which fell 3/4, or 1.3 percent, to 59; Bell South (BLS: Research, Estimates), off 15/16 at 44-1/4, a 2 percent decline on the day; and Alltel (AT: Research, Estimates), which slid ¼ to 66-5/8.
Chips regain momentum
Semiconductor stocks slogged through the early part of the session with modest gains, but then gained momentum toward the close, adding to the sharp gains posted Monday after an industry report showed robust growth in chip sales in 1999.
The Philadelphia Stock Exchange's semiconductor index advanced 17.09 to 920.07 at 904.33.
Shares of microprocessor giant Intel (INTC: Research, Estimates) ticked up 7/8 to 108-13/16. Meanwhile, Intel rival Advanced Micro Devices (AMD: Research, Estimates) edged up 1/16 to 41-3/8.
Analog Devices (ADI: Research, Estimates) slipped 3.6 percent lower, finishing down 4-1/4 at 114-3/4. Texas Instrument (TXN: Research, Estimates) shares finished up 4-3/8, or 3.3 percent, at 138-7/8. Linear Technology (LLTC: Research, Estimates) ended up 3-3/32 at 108. Micrel (MCRL: Research, Estimates) shares added 4-1/4 to 87, a 5.1 percent gain from the open.
Computer equipment makers also slogged through the day with only modest gains. The Goldman Sachs computer hardware index ended the session up 3.4 points at 537.8.
On the downside, Hewlett-Packard (HWP: Research, Estimates) fell 4-5/16, or 3.4 percent, to 124-3/16; Dell (DELL: Research, Estimates) slipped 9/16, or 1.5 percent, to 37-1/16; Gateway (GTW: Research, Estimates) shares ticked down 3-3/4 to 59-5/16, a 6 percent decline on the day.
Moving higher were: Apple (AAPL: Research, Estimates), up 13/16 at 114-7/8; IBM (IBM: Research, Estimates), up 4-1/2, or 3.9 percent, at 118-5/8; and computer networking equipment maker Cisco Systems (CSCO: Research, Estimates), which ticked up 1/8 to 125-5/8 ahead of the release of its fiscal second-quarter earnings. After Tuesday's closing bell, Cisco reported an operating profit of 25 cents per share on sales that rose 53 percent to $4.35 billion. Wall Street had expected the company to earn 24 cents per share during the quarter. 
-- from staff and wire reports
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