Nasdaq Closes at All-Time High

However, the Dow erased its gains in light trading to end modestly lower.
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Techies were in charge today, as the

Nasdaq Composite Index

roared to a new all-time high, and most other indices posted gains. Volume was light on the Big Board, but the Nasdaq posted strong volume and strong internals across the board.

A positive reaction by the bond market to the

Producer Price Index

, a key inflation indicator, was eaten up by the stock market, especially tech stocks. These stocks are sensitive to changes in interest rates, because lower interest rates decrease cost of capital.

The PPI rose 0.5% overall in August, while the core, which excludes food and energy prices, declined 0.1%. But the bond market rally may be short lived: oil prices closed at an annual high of $23.50 per barrel today, and the market's facing several more important speeches from

Fed

officials next week, along with the release of the

Consumer Price Index

, an indicator of inflation at the consumer level. Indeed, the Treasury market pared its gains at the end of the day.

There was love all around the room on the Nasdaq. The day's best performer in terms of percentage was

Appnet Systems

(APNT)

, which rose 115% (yes, really), or 17 13/16 to 33 on 13.9 million shares after a morning upgrade by

Credit Suisse First Boston

.

The day's most active was

Dell

,

(DELL) - Get Report

, overtaking

Amplidyne

(AMPD)

in the last hour of the session. Dell finished up 3/4 to 49 9/16 on 23.9 million shares, while Amplidyne closed at 12 1/4, up 2 3/16, or 21.7%, on 20.9 million shares. The stock took off after the company announced it had introduced new products for high-speed wireless Internet access.

The usual Net suspects, such as

Yahoo!

(YHOO)

and

eBay

(EBAY) - Get Report

, posted big gains today. Yahoo! rose 7 13/16 to 170 1/2, while eBay finished up 13 1/2, or 9.4%, to 158 after

Wachovia Securities

started coverage on the company with a buy rating. Meanwhile,

TheGlobe.com

(TGLO)

rose 4 13/16, or 45.3%, to 15 7/16.

TheStreet.com Internet Sector

index rose 14 points to close at 626.6.

CBS Marketwatch.com

(MKTW)

tacked on 8 13/16, or 23%, to 47 after announcing a content partnership with

AltaVista

.

Tech indices were uniformly strong today. The

Morgan Stanley High-Tech 35

finished at an all-time high of 1282.6, up 20.4, besting the record of 1262.3 set yesterday. The

Philadelphia Stock Exchange Computer Box Maker Index

also hit a new record, closing up 3 points to 336.94. The

Philadelphia Stock Exchange Semiconductor Index

was also higher, gaining 5.9 points to 564.77.

Automakers

Ford

(F) - Get Report

and

General Motors

(GM) - Get Report

said late Friday they would have to each recall more than 165,000 vehicles due to safety defects, but the stocks were unaffected. Ford rose 13/16 to 50 3/4 while GM, a component of the

Dow Jones Industrial Average

, gave back most of its gains to finish up 1/2 to 64 13/16, down from the intraday high of 66 7/16.

The Dow gave back all of its gains in the last half hour of trading to finish in the red.

J.P. Morgan

(JPM) - Get Report

, which rose as much as 2 points on the day, closed down on the day, off 7/16 to 128 1/16.

Procter & Gamble

(PG) - Get Report

held onto most of today's increase, but still came off today's all-time intraday high of 104 1/8, closing at 103 3/8, up 1 1/2. Other Dow stocks that spent most of the day in positive territory, such as

IBM

(IBM) - Get Report

, finished the day flat.

Also on the weak side were the

Dow Jones Transportation Average

, off 22 points to 2090.83, and the

Morgan Stanley Commodity Related Equity Index

, losing 1.73 to close at 221.04.

Premark International

(PMI)

was the Big Board's largest gainer in terms of percentage, jumping 16 7/16, or 48%, to 50 11/16 on 7.1 million shares. The company said yesterday it would be purchased in a $3.4 billion deal by

Illinois Tool Works

(ITW) - Get Report

, which fell 6 7/16, or 8%, to 73 11/16.

Shares of appliance maker

Maytag

(MYG)

fell 14 5/8, or 25.9%, to 41 15/16. The company warned third-quarter earnings would not meet expectations. Its competitor

Whirlpool

(WHR) - Get Report

confidently said it would be having no such problems, thank you very much. Well, screw you and your friend too, the market responded, knocking down Whirlpool 2 points to a close of 68 5/16.

For the day, advancers beat out decliners by a count of 1,518 to 1,315 on the

New York Stock Exchange

on 805 million shares. Same deal on the Nasdaq, where winners outpaced losers by a count of 2,144 to 1,668, on 1.1 billion shares.

A total of 93 stocks reached new highs on the Big Board while 75 fell to new lows. New highs on the Nasdaq totaled 180 while 59 stocks hit new lows.

Earlier...

3:01 p.m.: Nasdaq Roars Forward as Treasuries Rally Strongly

The

Nasdaq Composite Index

continued to cruise through Friday, benefiting from a point rally in the 30-year Treasury bond. The rally is built on the back of today's

Producer Price Index

report, and with about an hour left in the session, the tech-heavy Nasdaq figures to break another record.

2:11 p.m.: Nasdaq Leading Climb Higher

In the afternoon trading session, the major stock indices were clinging to their gains, with the

Nasdaq Composite Index

outrunning an all-time high. The tech stocks' strong performance boosted the

Morgan Stanley High-Tech

35 index up 23 to 1285, while the

American Stock Exchange Oil & Gas

Index was taking back some of yesterday's gains, down 1 to 543.

1:29 p.m.: Midday Musings: Bonds Lead Stocks Out of Morning Stupor

12:04 p.m.: Stocks Solidly Higher As Bonds Rally

The major stock proxies were solidly higher at midday, with the

Nasdaq Composite Index

cruising toward a new all-time high. The gains were supported by a big jump in the bond market thanks to a friendly

Producer Price Index

. But volume remained light ahead of the Rosh Hoshana holiday.

11:04 a.m.: Stocks Remain Higher in Light Trading

It might just be a

Truman Show

trading day: Good morning, good afternoon, good evening and good night, all before noon.

10:05 a.m.: Stocks Climb on PPI Data

Stocks did well off the blocks after the August

Producer Price Index

showed that inflation remains benign.