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7/23/1999
03:45 PM
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Market Wrap-Up: Tech Stocks Gain

Concerns about possible future increases in interest rates dragged down blue-chip stocks and government bond prices Friday. Technology stocks were more stable, however, as companies in the computer hardware segment gained.

Remarks made by Federal Reserve Board Chairman Alan Greenspan during his Humphrey-Hawkins testimony earlier this week have caused some investors to believe the Fed will increase rates again. Fears of a rate increase caused the Treasury's 30-year bond to decline 17/32 to yield 6.003%, its highest yield since July 9. Likewise, the Dow Jones industrial average declined 58.26 points to 10,910.96

The Nasdaq composite, however, gained 7.96 to 2,692.40, a small recovery from yesterday's technology stock rout.

Gateway (GTW) was the big gainer among computer hardware stocks, adding 10-1/8 to close at 73. The PC maker's stock was upgraded at several brokerage firms late yesterday and today after it released second-quarter profits that were above analyst expectations. Gateway said Thursday that its net income for the second quarter ended June 30 rose to $89.2 million, or 56 cents per share, from $60.7 million, or 38 cents a share, a year earlier. The company's results were aided by revenue from its non-PC businesses, such as software and providing Internet service.

The stocks of other computer hardware companies also were strong today, with Dell Computer (DELL) rising 1-3/8 to 41, IBM (IBM) adding 7/8 to 124-3/4, Hewlett-Packard (HWP) rising 2-1/2 to 107-3/4, and Sun Microsystems (SUNW) jumping 3-3/16 to 70-3/8. Sun yesterday reported that its revenue for the fourth quarter ended June 30 were a record $3.5 billion, up 22% from the same period in 1998. Revenue from Sun's enterprise services business rose by 38% in the quarter. Net income for the quarter reached an all-time high of $395 million, a 37% increase from $288 million in the 1998 period, excluding a charge related to an acquisition.

Compaq (CPQ) declined 1/2 to 24-1/2, even though its stock was upgraded to "outperform" from "neutral" at Morgan Stanley Dean Witter. The company yesterday named Michael Capellas as CEO and president, effective immediately. Capellas has been Compaq's chief operating officer since June 2.

Enterprise resource planning vendors' stocks were mixed, with SAP (SAP) rising 3/4 to 34-3/8, J.D. Edwards (JDEC) declining 1/2 to 16, PeopleSoft (PSFT) adding 11/16 to 14-1/16, Oracle (ORCL) dipping 1/16 to 36-3/16, and i2 Technologies (ITWO) losing 1/8 to 32.

Networking stocks also were mixed, with Lucent Technologies (LU) dropping 1-1/8 to 67-1/8, Nortel Networks (NT) rising 2 5/16 to 86-3/16, Cisco Systems (CSCO) adding 1-13/16 to 62-15/16, and Cabletron Systems (CS) dropping 3/16 to 12-15/16.

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