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Nasdaq surges on rebound in biotech, Internet shares

NEW YORK: The Nasdaq composite index scored its fifth largest point gain ever on Wednesday, spearheaded by a rebound in biotechnology and semiconductor stocks.

"After the very considerable pullback that we've had, especially in some of the biotech stocks people are looking around for reasons to buy a group that really got clobbered," said Trude Latimer, independent market strategist in Charlottesville, Va.

The Nasdaq composite index rose 153.07 points or 3.25 percent unofficially to close at 4864.69, not far from its closing high of 5048.62. Advancers beat decliners by 25 to 17 on volume of 1.7 billion shares.

The gains came one day after the index staged a huge turnaround erased the morning's rout and closed with a gain of just over 101 points after the announcement of the Federal Reserve's decision to raise interest rates by an expected quarter-of-a-percent.

Semiconductor stocks rocketed, led by a 31-percent surge in Rambus Inc. after Morgan Stanley Dean Witter analyst Mark Edelstone raised his price target for its shares to $500 each, up from $110, saying he expects strong earnings growth. The gains came a day after the stock fell more than 50 points. Rambus closed up 83-51/64 at 350-3/8.

Shares of Intel Corp., the world's largest chip maker, surged 5-10/16 to 144-1/16 and touched a new all-time high of 145-3/8 and Applied Materials Inc. rose 6-3/4 to 104-3/4.

The Philadelphia Stock Exchange's index of semiconductor stocks jumped 9.22 percent and wiped away nearly all of a 16.9 percent drop in the sector since March 14. For the year, the chip index is up a startling 85 percent in 2000.

The rally carried even Micron Technology Inc. - traded on the New York Stock Exchange - up 8-15/16 to 139-7/16. Micron's gains were surprising because the company's stock was expected to open sharply lower after the world's second-biggest maker of computer memory chips said profits for its fiscal second quarter fall far short of estimates.

Biotechnology shares also jumped with the Nasdaq Biotech Index rose nearly 8.5 percent. Human Genome Sciences Inc. rose 13-25/64 to 105-7/16 and Gene Logic Inc. rose 22-1/4 to 62.

Internet stocks also surged, led by NYSE-listed America Online Inc.. Shares of the biggest Internet service provider rose 3-15/16 to 71-1/2 after Merrill Lynch made positive comments about AOL's subscriber growth levels, which recently topped the 22 million subscriber mark.

TheStreet.com's Internet index was up 3.24 percent.

Among Nasdaq's large-cap stocks: Cisco Systems Inc. gained 3-33/64 to 144-3/8; Microsoft Corp. edged up 1/2 to 103-1/4; and Dell Computer Corp. rose by 1/8 to 58-1/8 after touching a new all-time trading high of 59-11/16.

Blue-chip stocks were mixed. The Dow Jones industrial average slipped 40 points to 10,866 while the Standard & Poor's 500 Index rose 6.77 points or 0.45 percent to 1500.64, a record closing high. -Reuters