Updated from 3:43 p.m. EST

Stocks finished strong Tuesday as investors put



troubles aside and focused on the positive aspects of the news coming from the technology sector.


Dow Jones Industrial Average closed up 129.88 points, or 1.3%, to 9893.84, while the

Nasdaq gained 58.20 points, or 3.1%, to 1963.10. The

S&P 500 was up 14.90 points to 1144.80.

Speaking at an analysts' meeting,


(CSCO) - Get Report

chief executive, John Chambers, said he's cautiously optimistic about the company's future although visibility remains limited. The network equipment company's shares closed up 66 cents, or 3.3%, to $20.52.

In addition,



lowered its fourth-quarter outlook, reporting that it now expects revenue of $4.1 billion to $4.2 billion, compared with the previous estimate of $4.2 billion. The company projected fourth-quarter income of 31 cents to 33 cents a share, which would be below the consensus estimate of 35 cents. Shares of the long-distance carrier shed 58 cents, or 2.7%, to $21.12.

Meanwhile, Enron rose on news the company has secured $1.5 billion of post-petition financing and is in talks for funding to salvage its energy trading business. Shares of the energy trader climbed 46 cents to close at 86 cents.



said it has reached a recapitalization agreement with

Fortsman Little

and its secured lenders. Under the terms of the deal, McleodUSA shareholders will retain 30% of the company's new shares, and the company isn't ruling out filing for bankruptcy. The stock fell 11 cents, or 21.2%, to 41 cents.


(SNPS) - Get Report

agreed to acquire



for stock worth $20.55 a share, or $769 million. Synopsys lost $2.36, or 4.3%, to $53.03, while Avant jumped $6.90, or 63%, to $17.85.

Reports Monday showed the manufacturing and construction sectors were making incremental progress, although a full recovery still appears months away. Another survey showed consumer spending bouncing back.

Overseas, European stocks were higher across the board, with London's FTSE 100 gaining about 0.9% to 5212 and Germany's Xetra Dax up 0.5% to 5014. Asian stocks were mostly higher, with the Nikkei finishing up 0.8% at 10,453 and the Hang Seng rising 2.4% to close at 11,427.

At 4 p.m. EST, the 10-year Treasury note was up 7/32 at 102 20/32, yielding 4.66%.