Wall Street: Thursday close

SANTA Claus came to Wall Street a few days late as good cheer about the outlook for high tech delivered a powerful rally.

The Dow Jones Industrial Average, which started the year with a 50-point gain on Wednesday, spiked higher by 98.74 points or 0.98% to 10,172.14. The tech-heavy Nasdaq Index, up 1.5% in the first day's trading of the New Year after a 20% drop in 2001, leapt 65.02 points or 3.28% to 2044.27.

Techs were front and centre as broker recommendations outweighed a profit warning or two. EMC, among the biggest heavyweight losers on the Nasdaq last year, vaulted $1.99 or 13.5% to $16.80 after Salomon Smith Barney said it saw brighter days ahead for the data storage company. Rival McData surged $3.58 or 13.3% to $30.46.

Strong interest in semiconductors continued, with an index tracking chipmakers up 6% on the day and 60% since early October. Intel jumped $2.52 or 7.6% to $35.52. Microngained $3.27 or 9.8% to $36.51 and Texas Instruments firmed $1.88 or 6.5% to $30.70.

Hewlett-Packard continued its recovery, gaining $1.31 or 6% to $22.96. Microsoft rose $2.19 or 3.3% to $69.23. Apple Computer tacked on 36 cents or 1.6% to $23.66 as the company promoted an unspecified new product announcement scheduled for next week. Cisco Systems, another of the big losers of 2000, regained $1.36 or 7% to $20.59.

Peregrine Software, which makes programmes to help companies manage personnel and inventory, plunged $5.26 or 36% to $9.25 as it warned that its numbers would fall short of expectations due to 'challenging global conditions.'

Weekly jobless claims rose 36,000 to 447,000, a sign that the unemployment situation remained weak despite retail hirings over the holiday shopping season. A more comprehensive report on unemployment is due out on Friday and economists expect it will be this data which dictates whether the US Federal Reserve Board will cut interest rates for the 12th time in just over a year when it meets again on 30 January. Richard Rippe, economist at Prudential Securities, said the report would be key to discerning the strength of the US economy, which slipped into recession officially in March. 'Economic signs in recent weeks point to stability, but if weakness continues to prevail, the Fed might ease one more time,' he said. 'The labour signs are critical to judging the short-term situation and so the national employment report due tomorrow is critical. We expect a rise in the unemployment rate.'

General Motors said vehicle sales rose 7% in the past month and announced it would offer rebates of as much as $2002 per vehicle to attract customers as it drives home its recent gains against old rival Ford. GM shares climbed 71 cents or 1.5% to $49.35. Dow Chemical gained $1.09 or 3.2% to $35.28 after its profit warning coincided with an upgrade from Merrill Lynch.

Among Dow components, Walt Disney added 67 cents or 3.1% to $22.12 on an upbeat outlook from chairman Michael Eisner and Alcoa rose 43 cents or 1.2% to $36.11.