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TECH STOCKS: Upbeat Outlook Spurs Rally

Stocks soared after Fed chairman Alan Greenspan gave a House committee a better-than-expected reading on the U.S. economy.
Stocks soared Wednesday after Federal Reserve chairman Alan Greenspan gave a House committee a better-than-expected reading on the U.S. economy, sending blue chips to a 2-1/2-year high. The Dow Jones industrial average rose 123.85 points, or 1.2%, to 10,737.70, its highest level since June 13, 2001.

Technology stocks joined the rally, with the InformationWeek 100 rising 3.91 points, or 1.16%, to 341.09. The tech-laden Nasdaq-100 tracking stock rose 1.08% at $37.58, as the Nasdaq composite ended the day up 14.33 points, or 0.7%, at 2,089.66. Its volume reached 2.2 billion shares. The Standard & Poor's 500 index rose 12.22 points, or 1.1%, to 1,157.76.

In his testimony, the Fed chairman repeated the board's current position that it could remain patient before hiking interest rates. Analysts say that indicates that the Fed isn't particularly concerned about inflation.

Among tech stocks, Motorola shares rose 5.4% after a Credit Suisse First Boston analyst upgraded the company's stock to outperform from neutral and raised his 2005 earnings outlook.

But not all tech stocks rose. Despite posting earnings that beat Wall Street expectations by a penny a share, online job service Monster Worldwide's stock fell 4.8%.

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Brian T. Horowitz, Contributing Reporter
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Jessica Davis, Senior Editor
Cynthia Harvey, Freelance Journalist, InformationWeek
Sara Peters, Editor-in-Chief, InformationWeek / Network Computing