The major stock market averages sprinted out of the gate this morning and they've continued running. The question is: Does today's rally have legs?

Jim Volk, co-director of institutional trading at

D.A. Davidson

, for one, doesn't think so. "The indices don't have a long way to go," he said. "Until we get a better idea of what is going to happen with the economy and consumer sentiment, we're going to be locked in a trading range."

Still, today's action is fun to watch. After erasing all of January's 14% gain earlier this month, the

Nasdaq Composite Index is up almost 100 points at midday. That gives it a gain of about 4% for the year. The technology-laden index has

Ciena

(CIEN) - Get Report

to thank for its strong performance.

This morning, optical networking gear equipment maker Ciena

announced earnings that beat Wall Street's estimates for its fiscal first-quarter and, more importantly, said that it expects its business to grow faster than the overall market. These days, a bullish outlook is key for investors, who have punished telecommunications equipment manufacturers and tech stocks in general because of the slowdown in technology investments. Investors were glad for the good news. Ciena was up 20.7%, and it was helping to push the

American Stock Exchange Networking Index

up 5.7%.

Optical stocks, which were up yesterday on the heels of

Sycamore Networks

(SCMR)

better-than-expected second-quarter earnings results, are also strong today. Sycamore was lately ahead 10.9%, while

JDS Uniphase

(JDSU)

was 12.6% higher to $46.31. It's still well off its 52-week high of $153.44.

Other pockets of strength on the Nasdaq today include semiconductor stocks. The

Philadelphia Stock Exchange Semiconductor Index

, which tracks the sector, was lately up 5.8%. Investors rewarded chipmakers yesterday on the heels of an analyst upgrade on the sector. Tuesday evening,

Applied Materials'

(AMAT) - Get Report

reported earnings that topped analyst estimates, but the company cautioned about its growth going forward. Despite that warning,

J.P. Morgan Chase

raised its ratings on five chip stocks yesterday to "long-term buy" from "market perform."

Internet stocks, notwithstanding a downgrade to sell from

Prudential Securities

on

Amazon.com

(AMZN) - Get Report

, are higher on the day. At last look,

TheStreet.com Internet Sector

was up 2.6%.

TheStreet.com's

Betsy Riley took a look at the

Amazon news.

He's been there for the highs and the lows. And this morning,

Merrill Lynch

analyst

Henry Blodget wrote that it is a good time for risk-tolerant investors to think about investing in some online-media companies. He included

AOL Time Warner

(AOL)

,

Yahoo!

(YHOO)

and

Homestore.com

(HOMS)

among his picks. TheStreet.com's George Mannes wrote a separate story about how Internet companies are due for a

steep climb.

Cyclical and technology stocks were lately taking the

Dow Jones Industrial Average higher. In recent action, the blue-chip index had erased nearly all of its 1%, loss from yesterday. The top three leaders:

3M

(MMM) - Get Report

,

IBM

(IBM) - Get Report

and

Hewlett-Packard

(HWP)

.

In recent trading, the biggest drag on the index was drug-giant

Merck

(MRK) - Get Report

. The drug maker confirmed full-year earnings estimates, but it and other pharmaceuticals are lower as investors move their money into tech stocks. Merck was off 3.5%, and

Johnson & Johnson

(JNJ) - Get Report

is 1.5% lower.

Investors are waiting from earnings news from PC-leaders

Dell

(DELL) - Get Report

and Hewlett-Packard that will come out after the closing bell. In recent action, the

Philadelphia Stock Exchange Computer Box Maker Index

TheStreet Recommends

was ahead 3.5%. Boxmakers have pulled back only slightly during the first two weeks of February, after turning in a strong monthly performance in January. The stock prices of computer companies, however, are significantly lower since consumers and businesses have reigned in their purchases of new equipment the past several months.

Hewlett-Packard is expected to post first-quarter earnings of 37 cents per share, according to earnings tracker

First Call/Thomson Financial

, while Dell is predicted to earn 15 cents per share for its fourth quarter. Wall Street will stay tuned for the results. Dell today announced that it is

laying off 1,700 employees -- or 4% of its staff -- in a move that was expected after a report recently said cuts were in the works. Dell is trading 8.7% higher.

Market Internals

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Most Active Stocks

Sector Watch

Transportation stocks were carrying sturdy gains in midday trading -- the

Dow Jones Transportation Average

was lately up 1.5%. Shares of

American Airlines

parent

AMR

(AMR)

were up 3.9%, while

United Airlines

parent

UAL

(UAL) - Get Report

was 2.5% higher.

Financial stocks have been cashing in on the day, with broker/dealers ringing up healthy gains. The

American Stock Exchange Broker/Dealer Index

was lately ahead 2.3%.

Bear Stearns

(BSC)

, which announced this morning that it plans to purchase NYSE specialist firm

Wagner Scott

for $625 million, tacked on 3.3%.

E*Trade

(ET) - Get Report

, now trading on the New York Stock Exchange from the Nasdaq, lifted 2.6%, while

Merrill Lynch

(MER)

boosted 4.3%.

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Treasury prices are lower for the fourth successive day as the money market trims hopes of an interest-rate cut next month from 50 basis points to 25 basis points. The fall in prices is steepest at the long end, with the 30-year bond two-thirds of a point down. The commercial and jobs data released this morning are slightly positive, but still indicative of a soft economy. Yields are a little higher for the notes and fairly flat for the longer-dated maturities.

The benchmark 10-year

Treasury note lately was down 16/32 to 98 15/32, raising its yield to 5.19%.

In economic news,

initial jobless claims

(

definition |

chart |

source

), which track the number of people applying for first-time unemployment benefits, fell to 352,000 in the week ended Feb.10, from 363,000. Economists had predicted a drop to 359,000 in a

Reuters

poll, so the lower number is a good sign. The reading, however, is subject to frequent revisions. The four-week moving average rose to 345,000, its highest value since early January.

Import and export prices

(

definition |

chart |

source

) were mixed for January, with the former down and the latter up. Prices for imports for all commodities slid for the second consecutive month, by 0.4%. The average price increase for the past 12 months has also declined consistently since September; the level now stands at 2.3%. Excluding oil imports, the average monthly and yearly increases were 0.3% and 1.6%, respectively. Meanwhile, total export costs were up 0.2% for January and are holding steady at 1.3% in their 12-month average. Excluding agricultural products, the price increases are 0.2% for January and 1% over the past 12 months.

The

Philadelphia Fed Index

(

definition |

chart |

source

), which measures regional manufacturing in Pennsylvania, New Jersey and Delaware, came out

below expectations at -30.5. After the steep fall to -36.8 in January, economists had been predicting a more marked improvement than this, forecasting the number would rise to -24. The number indicates contracting activity in factories when below zero, and though it is moving in the right direction, its slow progress indicates the severely depressed state of manufacturing. Almost every

Federal Reserve official has commented on the manufacturing sector's woes, so the latest information is not likely to surprise bond investors.

Finally, the

Consumer Comfort Index

(

definition |

chart ) rose by 4 points to 20, its highest level since the start of the year. The gauge reflects the state of the economy and how people are responding to general buying opportunities.

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International

Stocks were looking brighter in Europe.

London's

FTSE 100

was up 21.70, or 0.35%, to 6197.90. The

Xetra Dax

, which is still trading, was jumping 79.5, or 1.2%, to 6559.38, and the Paris

CAC-40

climbed 60.30, or 1.07%, to 5704.53.

The euro was lately trading at $0.9070.

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