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Techs Take a Breather

Also, Compaq preannounces, but closes up nonetheless.

SAN FRANCISCO -- Go figure. The tech sector rallied like crazy Wednesday following tame inflation news even though Treasuries showed a relatively muted reaction. Today, Treasuries ran wild following relatively bullish comments from Federal Reserve Chairman Alan Greenspan, but the tech sector showed a more modest gain.

Perhaps the market was just taking a breather after Wednesday's huge move. And price action could be considered impressive considering traders had every reason to take profits after Wednesday's rally. Gains in the sector came despite a preannouncement from



and a negative note out on


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Internet stocks were mostly higher, benefiting from the lessened interest rate concerns after Greenspan seemed to suggest that the


may enact a series of rate cuts, though he did hint that one was forthcoming later this month. But such a hike is seen as being priced into the market.

Compaq said that it expects a second-quarter loss of as much as 15 cents a share, way below the 20-cent estimate from

First Call


tipped off readers to potential problems at Compaq back in

May and also reported on potential problems addressed by

U.S. Bancorp Piper Jaffray

analyst Ashok Kumar last


Despite the warning, Compaq managed to close up 5/16, or 1.4%, at 22 9/16. Traders said much of the bad news about Compaq already has been priced into the stock and focus is on when the company will

hire a new CEO. In addition, Compaq said it has plans to restructure its business into three global units, each accountable for its own profit-and-loss sheet. The boxmaker said that the reorganization will include some job cuts, though it wouldn't specify how many.

Intel was not as fortunate. Citing lower prices for processors and lower unit shipments,

Credit Suisse First Boston

lowered earnings estimates for the year on the chipmaker to $2.25 from $2.32. That compares with the First Call estimate of $2.33. Intel closed down 1 11/16, or 3%, at 58.

Among Internet stocks, there were a number of strong performers.

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closed up 7 3/8, or 24%, at 38 5/8. has been on a roll since appearing at a

Bear Stearns

Internet conference earlier this week, though the stock has been hammered along with the rest of the Net sector over the past month.


K-Tel International


closed up 2 9/16, or 43%, at 8 1/2. The company said it had signed Internet distribution agreements to distribute its music and video products with


Prodigy Internet


. Prodigy closed down 1/2, or 2%, at 22 15/16.


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continued its recovery. Excite@Home split after the close on Wednesday and has traded higher since Tuesday when an


official indicated there may have to be a national policy regarding cable Internet services, instead of allowing local authorities to regulate the industry. It closed up 3 15/16, or 8%, at 51 5/16.



closed up 7 7/8, or 21%, at 44 3/4 after

BancBoston Robertson Stephens

reiterated a buy rating on the stock.

BancBoston Robertson Stephens also raised its rating on



to a buy from long-term attractive. It closed up 3 3/8, or 4%, at 96 1/2.