A late-day buying spree brought the major stock market indices to a positive finish on Friday, capping off a rally that followed the

Federal Reserve's interest-rate cut on Tuesday. Today's gains came despite a fresh round of profit warnings from large technology firms, which held the major averages in negative territory for much of the day.

On Thursday evening, PC maker


(DELL) - Get Report

, handheld computer leader



and technology services outfit


(A) - Get Report

all issued dim outlooks about their upcoming quarters.

Bad news aside, market experts said that Wall Street continues to look beyond the valley. "The Dell announcement was old news," said Tony Cecin, manager of Nasdaq trading at

U.S. Piper Bancorp Jaffray

. "Investors are focusing on the third and fourth quarters."


Dow Jones Industrial Average closed up 53.16 points, or 0.5%, to 11,301.74, while the

Nasdaq Composite Index finished ahead by 5.20 points, or 0.2%, to 2198.88. The broader-market

S&P 500 ended higher by 3.47 points, or 0.3%, to 1291.96.

"Investors took a bet on Wednesday that it's time to start buying into this rally, said Fred Maudsley, managing director of trading at


. "Portfolio managers that were on the sidelines are jumping back into the game."

After one of the biggest rallies of the year on Wednesday, the Dow is trading back above the 11,000 benchmark level. For the week, the industrials were up 4.4%. As of today's close, the blue-chip index is only 3.6% off its record close, reached on Jan. 14, 2000. The Nasdaq, still 56.4% off its all-time high hit in March 2000, is up 34% since hitting a recent low of 1638.80 on April 4. The Comp gained 4.3% for the week.

The Federal Reserve's fifth rate cut this year, which came on Tuesday, may have reignited bullish investors' faith the economy soon will get back on its feet. Investors clung to belief in a second-half rebound during April, when stocks enjoyed a stellar monthlong rally. But they lost the faith in early May ahead of the Fed meeting, and stocks slogged lower in thin volume.

For now, the market is caught in an uneasy limbo. The latest rate cut is providing a nice gust of wind under its wings. But second-quarter earnings preannouncement season has begun, and it doesn't look pretty.

PC maker Dell yesterday

lowered its revenue forecast for its second quarter and dropped its earnings forecast. The company, however, met analysts' fiscal first-quarter earnings. Dell fell 4.1% to $24.82.

Handheld computing company Palm also aired some dirty laundry,

slashing its fiscal fourth-quarter revenue outlook in half. The company also said it would take a $300 million inventory charge, called off its merger with

Extended Systems


, and announced plans to cut 15% of its workforce. Palm tumbled 29.2% to $5.



spinoff Agilent said Thursday that it expects a sizable loss and a drop in sales for fiscal third quarter. The company reported fiscal second-quarter earnings that were down 42% from a year ago and a penny below already reduced estimates among analysts. H-P closed down 3.4% to $29.85, and Agilent shed 7% to $36.

European indices closed tentatively higher, overcoming weakness in



. The French telecommunications company -- lately down 7.9% to $29.50 -- is reportedly in talks to buy



in a deal said to be worth $40 billion, a 20% premium on Lucent shares. Lucent advanced 2.7% to $10.06.

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Europe's major indices were stronger this morning, as buoyancy in energy stocks was countering weakness in Alcatel on talk that it plans to buy Lucent for a 20% premium. London's

FTSE 100

closed up 10.5 to 5915.

Across the channel, the Paris


edged up 45.6 to 5,638, while Frankfurt's

Xetra Dax

gained 22.5 to 6196.3

Asian stocks closed lower overnight ahead of a reweighting of global market indices, with three-digit losses in Hong Kong. Tokyo's key

Nikkei 225

closed 32.9 lower to 13,877.8. Hong Kong's

Hang Seng

dropped 178.7 points to 13,459.2.

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