Amazon Leads Tech Stocks Higher

A $1 billion share buyback boosted shares Friday and drew investors into technology shares for a second day.

After plunging 5% in the first three days of the week on slowdown fears, the Nasdaq has gained more than 2% off Thursday’s low despite a warning from Cisco that the slowdown is real.

But investors have begun to see signs of value in the sector, driven in part by Microsoft’s nearly $45 billion bid for Yahoo. Shares of both companies edged higher Friday on reports that Yahoo’s board is meeting to consider its options.

Amazon was another sign of value, up nearly 4% after the company said it will buy back shares and part of its debt too. Former sector leaders that have been battered in recent months, like Research In Motion, Apple and Google, also caught a bid today. With the Federal Reserve and Congress working feverishly to stimulate the economy, investors may be betting that the downturn will be short-lived.

CNET gained 8% on reports that Google may be weighing a stake in the company.

McAfee, Cognizant and Adept Technology gained on their results, and HP recovered much of Thursday’s 4% drop on a Goldman Sachs downgrade.

Alcatel-Lucent was off 4% after beating sales estimates but warning of a first-quarter loss and halting its dividend, as the company’s troubles have been compounded by a slowing economy. Real Networks fell 5% on its results, and Aruba Networks tumbled 36% on a warning.

AMD fell 4% on reports that Dell may use fewer chips from the company.

Micron lost 6% following its analyst day.

Blue chip stocks, meanwhile, sagged on concerns that a bailout of bond insurers has yet to materialize.

The Nasdaq rose 11 to 2304, the S&P lost 5 to 1331, and the Dow fell 65 to 12,182. Volume declined to 3.75 billion shares on the NYSE, and 2.27 billion on the Nasdaq. Decliners led by a 19-13 margin on the NYSE, and 17-12 on the Nasdaq. Upside volume was 34% on the NYSE, and 65% on the Nasdaq. New highs-new lows were 31-97 on the NYSE, and 46-129 on the Nasdaq.

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