Midday Report: Nasdaq Gains as Techs Continue Advance

Technology stocks were up for a second consecutive day Tuesday, pulling the Nasdaq Composite Index up 85.85 to 2,228.77 by early afternoon.

Cisco Systems (Nasdaq: CSCO), up US$1.48 to $24.56, was the most active Nasdaq issue. Dell Computer (Nasdaq: DELL), Sun Microsystems (Nasdaq: SUNW) and Oracle (Nasdaq: ORCL) — all hit especially hard in the technology rout of recent weeks — also contributed to the advance.

Profit warnings from technology companies did not stop buyers from stepping in. Xilinx (Nasdaq: XLNX), Varian Semiconductor (Nasdaq: VSEA) and TriQuint Semiconductor (Nasdaq: TQNT) were all higher in midday trading despite news that quarterly results will fall below previous expectations.

Blue-chip issues also rose, helped by advances in technology issues. The Dow Jones Industrial Average was up 68.68 at 10,630.98. The Standard & Poor’s 500 stock index, meanwhile, was up 18.71 at 1,260.12.

Xerox Up, Siebel Down

Xerox (NYSE: XRX) was up 26 cents at $7.02 after the company said it will sell half its stake in Fuji Xerox to its joint-venture partner, Fuji Photo Film, for more than $1.3 billion in cash.

The sale puts Xerox on track to meet its goal of $2 billion to $4 billion in asset sales, and will result in a $310 million after-tax gain.

There were some losers, however. Siebel Systems (Nasdaq: SEBL) was down $3.43 at $30.19 following reports of a downgrade by Merrill Lynch. Reports that the software maker’s head of sales left the company also hurt the stock.

E-Commerce Improves

E-commerce shares also benefited from investor enthusiasm for technology stocks. The E-Commerce Times Index was up 2.65 percent at midday, led by gains in Cyberian Outpost (Nasdaq: COOL), E*Trade (Nasdaq: EGRP) and eBay (Nasdaq: EBAY).

Egghead.com (Nasdaq: EGGS) was down 3 cents at 78 cents after laying off 77 workers at its Menlo Park, California headquarters and its Vancouver, Washington offices. The e-tailer recently moved 20 percent of its staff to Vancouver as part of a plan to cut costs.

Homestore.com (Nasdaq: HOMS) was up $3.50 at $30.44 after Goldman Sachs added the stock to its recommended list, calling the stock the “best defensive name in (the) Internet sector.”

In economic news, reports said that worker productivity rose 2.2 percent in the fourth quarter, faster than expected, while U.S. factory orders fell to their lowest level since November 1999.