Market Close: Dow Ends Slightly Lower; Nasdaq Closes Above 3400

<LI>Intel issues strong forecast.</LI><LI>Internet stocks jump.</LI><LI>Cyclicals rotate down.</LI>

Author:: David A. Gaffen
Publish date:: Nov 2, 2000 5:23 PM EST

<LI>Intel issues strong forecast.</LI><LI>Internet stocks jump.</LI><LI>Cyclicals rotate down.</LI>

The two-week swing upward continued today, as the Nasdaq Composite Index rallied solidly. Support from the Dow Jones Industrial Average, meantime, was less pronounced. The blue-chip measure was tried to break away from break-even, but with little success. Sectors that were punished yesterday rallied today.

Today's most notable turnaround was in the semiconductor sector, which had fallen sharply yesterday on the back of a revenue warning from specialty chipmaker

Altera

(ALTR) - Get Report

. Good news from

Intel

( NT), which gave strongly positive guidance for the coming years, has cooled jittery investors' heels. Intel was up 4%.

report from the

Semiconductor Industry Association

had chip manufacturers stronger. According to the group's research, global semiconductor sales are expected to rise 37% this year, to $205 billion -- the highest ever -- and could reach $319 billion by 2003. Those figures have sent the

Philadelphia Stock Exchange Semiconductor Index

-- which closed down 3.8% yesterday -- up 2.6% today.

The most active stock on the

New York Stock Exchange today was

Nortel Networks

( NT), down $1.38 to $42.63 on 21.6 million shares. The Nasdaq's most active was

Oracle

(ORCL) - Get Report

, which has bounced around on rumors of executives leaving the company, but there's been no news to confirm that. The stock was down $1.81 to $29.56 on 151 million shares.

Today's tech rally extended to the Net sector, where

TheStreet.com Internet Sector

, or the DOT, was up 6.4%, and to PC manufacturers, where the

Philadelphia Stock Exchange Computer Box Maker Index

was ahead by 2.6%.

Lower-case "e" companies,

eBay

(EBAY) - Get Report

and

eToys

( ETYS), in addition to

Amazon.com

(AMZN) - Get Report

, emerged as today's leaders of the Internet pack.

In economic news, Wall Street got a heads-up on productivity. The government's

productivity and unit labor costs report showed that the efficiency of U.S. workers rose 3.8% during the third quarter. That was more than the 3.1% expected, but less the second-quarter's figure. Unit labor costs also grew faster-than-expected, showing a 2.5% gain. That was well above market expectations for a 1.5% increase and the previous quarter's 0.2% decline.

High productivity can allow stronger growth to coincide with sustainable levels of inflation -- a good thing. But high unit labor costs, which measure worker compensation as adjusted for changes in productivity, can accelerate inflation -- a bad thing.

Headlining tomorrow's economic events is the October

employment report, which contains information about both job and wage growth. The report is considered the single best measure of the health of the economy.