SAN FRANCISCO -- Strength in IBM (IBM) - Get Report following news of its deal with Dell (DELL) - Get Report contributed to a huge run-up in the Dow Jones Industrial Average. And while the Nasdaq Composite rallied along with the Dow late in the day, the session was by no means a clear winner for the tech sector.

Analysts found many positives for IBM but little in the deal that would be a boon for Dell. IBM added 3 7/8, or 2%, to close at 170 5/8, off its session high of 177. Some of the weakness was attributed to a statement from IBM in the afternoon telling analysts not to change earnings estimates for 1999.

As part of the seven-year, $16 billion agreement, Dell will purchase storage, microelectronics, networking and display technology from IBM for integration into Dell computer systems. In the future, the agreement is expected to include IBM's copper, silicon-on-insulator and other technologies.

Disk drive makers could be among the companies hurt should IBM step up its disk drive production with the deal. Among the disk drive stocks are




Data General









Western Digital

(WDC) - Get Report


And service providers could be hurt should Dell sign a services deal with IBM. Among those companies are


(UIS) - Get Report



(NCR) - Get Report


Wang Global


, which has a contract with Dell to provide service and tech support for Dell customers worldwide.

Intel Buying Level One

After the close,


(INTC) - Get Report

said it would buy network chip maker

Level One Communications

(LEVL) - Get Report

for $2.2 billion in stock.

Intel closed 1 5/16 lower at 113 3/8 despite an upgrade from

Gruntal & Co.

to strong buy from buy. Intel will offer 0.43 share for each Level One share. Level One dropped 5 1/4, or 16%, to 27 1/8 following a downgrade to accumulate from strong buy from

Adams Harkness


Intel also has a small stake in


, which is a Level One competitor.

H-P Downgrade


analyst Don Young, after hearing from Hewlett-Packard executives this

morning, downgraded the stock to neutral from attractive.

"It is clear from today's meeting that the repackaging might even be seen as unfavorable, as profits are somewhat evenly split rather than in favor of the higher valued computer organization," he told clients this afternoon.