Microsoft Gives Tech Stocks a Lift

News that Microsoft’s Vista operating system may ship on time gave the tech sector a boost on Friday.

The news helped Microsoft’s shares and also benefited the likes of HP and AMD . Microsoft gave back some of its gains later in the day on comments from an S&P analyst that its shares are fully valued.

The Nasdaq moved within 1% of its post-2002 high on the news, and blue chip stocks reluctantly came along for the ride despite margin concerns at GE and unexpectedly weak September retail sales.

LightPath soared after raising guidance, while MSC fell on its outlook.

Overland tumbled on the loss of a tape storage deal with Dell , and Saifun also fell after losing business.

Acme Packet and eHealth had stellar IPOs.

Red Hat fell on a Jefferies downgrade on potential competition from Oracle .

The Nasdaq rose 11 to 2357, the S&P 500 added 3 to 1365, and the Dow gained 12 to 11,960. Volume declined to 2.48 billion shares on the NYSE, and 2 billion on the Nasdaq. Advancers led 19-13 on the NYSE, and 18-11 on the Nasdaq. Upside volume was 62% on the NYSE, and 73% on the Nasdaq. New highs-new lows were 312-10 on the NYSE, and 235-39 on the Nasdaq.

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