Shares of troubled smartphone manufacturer Palm ( PALM) surged Thursday as investors warmed to the launch of the firm's new touch-screen phone and its long-awaited webOS operating system.

Buoyed by the launch at the Consumer Electronics Show (CES), shares of the struggling tech giant climbed 34.9%, or $1.15, to reach $4.45 at the close of trading.

Palm will now be hoping that the Pre Phone and the new operating system will help turn the company's fortunes around after a difficult few months marked by slowing sales and a plunging share price.

Offering both an iPhone-style touchscreen and a slide-out keyboard, the 3G Pre phone will be available from Sprint ( S) during the first half of 2009.

The webOS operating system has been built specifically for mobile devices, according to Palm, and contains a number of Web technologies such as XHTML, JavaScript and CSS. The operating system also offers combined messaging, which links IMs and text messages, and can also update contact information across multiple applications, such as Microsoft ( MSFT) Outlook, Google ( GOOG) and Facebook.

Palm, which recently received a cash infusion from its private-equity backer Elevation Partners, has not had the easiest of times recently. Even disregarding the huge tax allowance that threw a half-billion dollar loss on the books for the second quarter that Palm reported last month, the company still had an operating loss of $77.5 million on revenue of $191.6 million, which was down 45% from a year earlier.

Faced with stiff competition from Apple ( AAPL), Research In Motion ( RIMM), and Google, Palm posted a pretax loss of $140 million for the latest six-month period.

TheStreet.com's senior tech reporter Gary Krakow is currently stalking the halls at CES, so keep your eyes peeled for a more detailed report on Palm's latest technology.

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