Today's Market: Tech Stocks Charge Higher, Leaving Blue-Chips Behind - TheStreet

(Updated from 9:41 a.m. EDT)

These days on Wall Street, any news short of catastrophe is good news.

Cheered by a report from chipmaker

Xilinx

(XLNX) - Get Report

that

reaffirmed its first-quarter revenue targets, and a

Goldman Sachs'

upgrade on German software maker

SAP

(SAP) - Get Report

, investors were scooping up tech stocks this morning.

At 10:15 a.m., the

Nasdaq was up 41.5 points, or 1.9%, to 2197.4; the

Dow was down 8.26 points, or 0.1% to 11,053.26; and the broader

S&P 500 was up 4.58 points, or 0.4%, to 1271.69.

Tech giants

Cisco

(CSCO) - Get Report

,

Sun Microsystems

(SUNW) - Get Report

and

Intel

(INTC) - Get Report

were notching smart gains in early trading, too..

Investors took in stride this morning's weaker-than-expected

productivity and labor costs

data released before the bell. First-quarter productivity was revised to a 1.2% decline from a previous estimated 0.1% decline and a 0.7% fall forecast by economists. That's the biggest gain for unit labor costs since the fourth quarter of 1990, a jump of 6.8% vs. an expected 5.8% gain. High productivity levels in recent years have been credited with allowing the U.S. economy to grow at a rapid "New Economy" pace with little threat to runaway inflation.

Investors may have been able to brush off productivity data as the downward trend in productivity in the first quarter was highly anticipated. And

Federal Reserve Chairman

Alan Greenspan's recent declaration that inflation is not a major issue may have softened the impact of the high inflation numbers.

While tech bulls were running the show this morning, investors eager for a clearer indication that the outlook for tech is improving are awaiting Intel's midquarter update after the close of regular trading Thursday.

"All eyes are on Thursday's meeting at Intel," said Matt Johnson, head of Nasdaq trading at

Lehman Brothers

. "There's no reason for volume to pick up -- no catalyst." Johnson said he expected the Nasdaq and the S&P 500 to outperform the Dow today as investors rotated out of Old Economy names into tech.

Yesterday, the Nasdaq rose just 6.49 points to 2155.93. But the

blue-chip Dow gained 71.11 to 11,061.52.

Stocks have drifted north over the past three sessions as investors hold back for signs that the earnings slowdown is bottoming out. All eyes are on Intel because it is seen as something of a benchmark for the rest of technology. Sun Microsystems ushered in the

second-quarter confession season when it warned last Tuesday it would miss its second-quarter performance targets, and Wall Street is hoping that earnings will begin accelerating again in the fourth quarter of this year or early next year. Stocks fell sharply in response to Sun's warning.

Meanwhile,

OPEC

ministers meet today in Vienna to decide whether to increase their oil output. On Monday, OPEC promised to match any output shortfall resulting from Iraq's suspension of oil exports. Iraq exports 2.1 million barrels a day of oil.

Specialty chipmaker Xilinx told analysts in a midquarter business update Monday night that cancellations and delays have slowed considerably, and that it expects to match first-quarter revenue targets, which call for a 15% to 25% decline vs. the fourth quarter. The stock was up 5.9% in early trading.

In other corporate news,

Hewlett-Packard

(HWP)

agreed to hand over $400 million to Pitney Bowes for a printer technology patent suit and restated its fiscal second-quarter earnings. H-P was off 0.8% to $29.36 so far this morning. And

FleetBoston

(FBF)

said it would buy

Liberty Financial's

(L) - Get Report

asset-management business for $900 million, not including the assumption of $110 million in debt. FleetBoston was up 0.2% to $41.89.

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Bonds/Economy

Treasury prices were rising this morning following the release of weak productivity data, with strength balanced between the long and short ends of the market.

The benchmark 10-year

Treasury note was lately up 5/32 to 97 18/32, while yields had slipped to 5.322%. Prices on the 30-year note were up 5/32 higher to 95 18/32, as yields dropped to 5.684%.

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International

European markets were narrowly mixed as they neared midsession, with Frankfurt wading in the red and London and Paris equities moving higher. The German

Xetra Dax

was losing .03% to 6175.7. The

FTSE 100

was up 7.6 to 5864.1 and the Paris

CAC-40

was lifting 42.98, or 0.79%.

The euro was lately trading higher at $0.8468. The dollar was trading at 120.11 yen.

Asian markets were also mixed overnight. Tokyo's

Nikkei 225

ended off 0.98%, while Hong Kong's

Hang Seng

closed up 1.85%.

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