Tech stocks led the
to its third-straight winning session, with some of the traditional high-value stocks leading the way upward.
Investors may have been buoyed by expectations that the
finger was itching to pull the trigger again on yet another rate cut.
"There is a sentiment out there that we're going to see some more action soon," said Scott Kaplan, a partner in
The optimism helped investors brush off bad news and warnings, including a note from
Banc of America Securities
analyst Kurtis King this morning that said "there is more negative news still to come" from the computer makers.
Maybe somebody should have listened.
finished up 44 cents, or 2%, to $22.90 before warning after the close that it wouldn't make revenue projections for the current quarter.
, which reduced estimates for the quarter in November, got more bad news out early, releasing earnings that fell far short of lowered expectations after the market closed. Gateway rose 14.9% before the call.
But not many investors were listening to the bad news.
Morgan Stanley Dean Witter
Credit Suisse First Boston
reduced their estimates this morning for giant networker
, after CEO John Chambers let it slip yesterday that things were less than rosy in the world of routers.
The reaction: Cisco closed up $2.84, or 7.9%, to $39.13.
Other networking biggies also benefited.
, whose estimates were lowered by UBS Warburg, still finished up $2.13, or 6.6%, to $34.06. And often-maligned
also rose, finishing up 3.2%.
Traditional high-growth, high-value tech stocks among the opticals also rose, even when the news was a little mixed.
analyst Jim Liang wrote that while he expected optical component giant
to make its numbers for the December quarter, inventory stockpiles made future quarter earnings murkier, especially in light of Nortel's and Lucent's warnings.
He also predicted some coming good news for JDS -- the approval of its delayed merger with
have others, he speculated that the combined company would win federal approval by selling its pump laser chip factory in Zurich, Switzerland, to competitors. The bad news is that the combined company would have to give up overwhelming dominance in a very lucrative industry. WR Hambrecht has no underwriting relationship with JDS or SDL.
JDS finished up $2.69, or 5.8%, to $49.38. SDL also finished higher, $9.31, or 5.5%, to $179.63.
Cisco's call failed to dampen the prospect of some of the semiconductor companies that sell into its communications networking business.
Salomon Smith Barney
analyst Clark Westmont wrote today that
Applied Micro Circuits
all had at least 10% of their sales to Cisco. That makes them vulnerable to a slowdown that Cisco's announcement signaled.
Nonetheless, the chip stocks rose. AMC ended up 3.5%, Broadcom rose 5.3%, PMC was up 6.6% and Vitesse ended the day up 6.7%.