Wednesday December 5 12:03 PM ET

Dow Above 10,000, Nasdaq Over 2,000

By Elizabeth Lazarowitz

NEW YORK (Reuters) - Stocks strode higher in late morning trading on Wednesday, pushing the Dow above 10,000 and the Nasdaq over 2,000 for the first time in months as investors bet the worst may be over for the battered high-tech sector.

``You still have negatives looming out there ... but right now people are willing to look forward and say this could be the sea-change,'' said Joseph Zock, president and portfolio manager at Capital Management Associates, which oversees about $1 billion.

Expectations for a quick economic turnaround got a boost from the latest economic data -- including a report that showed a sharp snapback in the U.S. services sector. Upbeat comments from high-tech bellwethers like Cisco Systems Inc. in recent days helped fan speculation the tech sector is poised for a rebound.

At the same time, investors were ditching more defensive issues, like shares of utilities, health-care and tobacco companies often sought as a safe haven in times of economic uncertainty.

The Nasdaq Composite Index raced 63.86 points, or 3.25 percent, higher to 2,026.96, piercing the psychologically key 2,000 level for the first time since Aug. 8. The Dow Jones industrial average also blazed past a major psychological point, rising past 10,000 level for the first time since Sept. 6.

The Dow climbed 166.27 points, or 1.68 percent, to 10,060.11, while the broader Standard & Poor's 500 Index jumped 18.98 points, or 1.66 percent, to 1,163.78.

Trading volumes were extremely heavy, with about 691 million shares changing hands in the first two hours on the New York Stock Exchange, where more than two times as many stocks rose as fell. About 1.1 billion shares were traded on the Nasdaq.

``There are signs that things are starting to improve,'' said Noah Blackstein, portfolio manager at Dynamic Power American Fund, which oversees $230 million. ``The debate is now over the shape of the recovery, rather than how much further can we fall.''

Internet networking giant Cisco Systems blazed higher and was the Nasdaq's most active share a day after its chief executive said that November orders met expectations as the biggest maker of computer-networking equipment grapples with anemic sales, suggesting the economic bottom is past.

``People were glad to hear that the news from them was that their business is starting to turn the corner,'' said Charles White, president of investment firm Avatar Associates. ``It sort of portends well for the middle of 2002 to really see us coming back and starting to get some growth.''

Cisco jumped 92 cents to $21.44, while software heavyweight Oracle Corp. (Nasdaq:ORCL - news), the world's No. 2 software maker, climbed $1.31 to $15.11. Oracle added to the positive vibes on Tuesday after its chief executive said business had stabilized and could see growth next year.

More positive news could come from Intel Corp.(Nasdaq:INTC - news) on Thursday, when analysts say it will likely raise its fourth-quarter sales forecast because it has been selling more of its higher-priced Pentium 4 chips rather than older, less profitable Pentium III microprocessors.

Semiconductor stocks were charged higher for a second day in a row on Wednesday, as major computer memory chip makers discussed raising prices. The Philadelphia Stock Exchange's semiconductor index jumped 5.7 percent.

Oil stocks were also on the rise after Russia said it would cut its oil exports by about 5 percent from next year, in response to calls from oil cartel OPEC to support world crude prices. The American Stock Exchange's oil index rose 1.41 percent. NYMEX January crude oil futures rose 35 cents to $20.

A key report showed an unexpectedly strong rise in U.S. service sector activity last month.

The National Association of Purchasing Management's non-manufacturing index climbed to 51.3 in November vs. 40.6 in October. The November reading points to some growth in the service sector and it cruised past expectations for a reading of 42.7.

U.S. Treasury bonds, which are often sought as a safe-haven in times of economic distress, plunged sharply as the report and Wall Street's rally boosted expectations for a quick economic comeback.

Investors are on edge, however, ahead of a slew of economic data this week, including productivity and factory orders figures on Thursday and Friday's key government report on the U.S. labor market, analysts said.

-- Anonymous, December 05, 2001