SAN FRANCISCO -- And now, for something completely familiar.

The

Nasdaq Composite Index

and

Russell 2000

each eclipsed

yesterday's record closes as investors continued to flock into technology and biotech stocks. Meanwhile, blue-chips struggled as further signs of economic strength and another jump in crude prices kept blue-chip investors focused on the potential for additional

Federal Reserve

rate hikes.

The Russell climbed 10.64, or 1.8%, to 588.35, aided by smaller tech names and rampaging biotech stocks. The

American Stock Exchange Biotech Index

rose 5.4%. Additionally, the Russell's second-straight record close came amid improving breadth and huge volume.

In

New York Stock Exchange

trading, 1.274 billion shares were exchanged -- the busiest day in NYSE history -- while advancers edged declining stocks 1,558 to 1,481. In

Nasdaq Stock Market

action 2.100 billion shares traded -- the busiest session ever -- while gainers led 2,428 to 1,846. New 52-week lows bested new highs 145 to 119 on the Big Board while new highs routed new lows 511 to 85 in over-the-counter trading.

The Nasdaq rose 87.62, or 1.9%, to 4784.31 behind strength in bellwether names such as

Intel

(INTC) - Get Report

,

Microsoft

(Nasdaq)

and

Sun Microsystems

(SUNW) - Get Report

. The

Nasdaq 100

gained 0.9%.

3Com

(COMS)

rose another 4.9% amid continued excitement over the IPO of its Palm unit. Additionally,

Apple

(AAPL) - Get Report

leapt 13.6% to an all-time high of 130 5/16.

priceline.com

(PCLN)

rose 15.5% after making positive comments at the

Robertson Stephens

technology conference here.

Among NYSE tech heavyweights,

Qwest Communications

(Q)

leapt 28% amid reports the company has held merger talks with

Deutsche Telekom

(DT) - Get Report

, which rose 5%.

Lucent

(LU)

rose 14.5% after announcing plans to spin off three of its units.

SG Cowen

upped its recommendation on the company to buy from neutral.

Finally,

Micron Technology

(MU) - Get Report

added another 6% to its already remarkable run after

Morgan Stanley Dean Witter

upped its price target. Still, the

Philadelphia Stock Exchange Semiconductor Index

rose just 0.2% to 1172.18 after trading at high as 1190.67.

TheStreet.com Internet Sector

index rose 16.67, or 1.4%, to 1199.53 while

TheStreet.com New Tech 30

gained 51.32, or 6.6%, to 833.43. Unveiled Jan. 5, the TSC New Tech 30 is a market-cap-weighted index focusing on tracking the so-called hot money part of the market. A list of index components is available at

http://www.thestreet.com/newtech/.

"It's tech's ball to lose," said John Manley, equity strategist at

Salomon Smith Barney

. "Portfolio managers faced with a tightening Fed are almost forced into tech stocks. If you're running big money you want to own big, liquidity stocks with good growth and positive earnings revisions. There's nothing like tech."

Manley -- admittedly not a momentum investor -- said some of the "outsized" gains in tech seem "irrational" but cautioned against underweighting the group.

"The valuations are very high but sometimes what appears to be excessive is an adequate appreciation of growth," he said. " As long as you keep seeing

earnings numbers that are positive, people will move in that direction. Nothing succeeds like success."

Wither Dow?

Once again, the

Dow Jones Industrial Average

found itself relegated to the backburner of Wall Street's stove. The venerable index closed up 8.07, or 0.1%, to 10,136.38 after spending most of the day in a tight range around breakeven.

In addition to Intel, the Dow got its biggest boost from

SBC Communications

(SBC)

, which rose 9.6% on

news the company is considering combining its cell-phone operations with

BellSouth's

(BLS)

. BellSouth rose 5.9%.

Timothy Heekin, director of equity trading at

Thomas Weisel Partners

in San Francisco, noted the Dow would have been down if not for SBC's rise. The overall action telecom names, notably Qwest and Lucent, was one of the "big drivers" of a session that otherwise "wasn't great," he said.

"I don't think today was anything extraordinary," Heekin said. "It's totally a rotational market. They continue to want to buy tech and sell big-cap value. Tomorrow you could have the Dow up 200 and Nasdaq down 100, but until I see a real concentrated move where they're knocking the stuffing out of the Comp, that's the only time I'll reverse myself."

The

S&P 500

rose 12.83, or 0.9%, to 1379.25 as strength in tech favorites, energy and brokerage stocks overcame weakness in retailers, drug makers and cyclical stocks.

The

American Stock Exchange Broker/Dealer Index

rose 5.8% after

Salomon Smith Barney

upped estimates and price targets on

Merrill Lynch

(MER)

,

Paine Webber Group

(PWJ)

and

Morgan Stanley Dean Witter

(MWD)

. Additionally,

Merrill Lynch

upped its earning estimates on

Lehman Brothers

(LEH)

, which rose 10.4%.

Another big story of the day was

Aetna

(AET)

, up 29% before being halted after

CNBC

reported the insurer had received a takeover bid from

Wellpoint Health Networks

(WLP)

and

ING Barings

. Wellpoint was down 8.3% before being halted.

In

economic news, the

Commerce Department

said construction spending rose 2.7% in January, its fastest pace sine June 1998 and wildly ahead of expectations. Also, the

National Association of Purchasing Management's

headline purchasing index hit 56.9 in February and the prices paid component came in at 74.1; both were slightly higher than expectations. Meanwhile,

crude prices rose $1.27 to $31.70 amid conflicting reports about

OPEC's

plans to increase production.

In reaction, the

Philadelphia Stock Exchange Oil Service Index

rose 6.1% but the price of the 30-year Treasury bond fell 9/32 to 101 7/32, its yield rising to 6.15%.

Among other indices, the

Dow Jones Transportation Average

rose 8.91, or 0.4%, to 2397.77; the

Dow Jones Utility Average

fell 1.10, or 0.4%, to 287.38; and the

American Stock Exchange Composite Index

gained 28.72, or 3%, to a record 1001.95.

For coverage of today's top stocks in the news, see the Company Report, published separately

.