Microsoft led the stock market higher, putting an end to a one-day slump in technology shares and lifting the Dow Jones industrials.
The Dow rose 65.15 points to close at 11,225.32. Microsoft accounted for more than half the gain, and Intel contributed nearly all the rest.
Broader indicators closed higher after reversing early declines. The Standard & Poor's 500-stock index rose 10.16, to 1413.33, and the Nasdaq composite index rose 50.29, to 3621.95.
Stocks rose after Microsoft said its Windows 2000 code, which has been held up in numerous delays, has been delivered to software manufacturing plants. Retail customers will be able to buy Windows 2000-based products starting Feb. 17.
Microsoft shares rose 9 3/4, to 108-7/16, its highest close ever. The gain sent Microsoft's market capitalization soaring to nearly $560 billion.
In recent sessions, Microsoft has rebounded from a slump that began in early November, when a federal judge said the company had abused its monopoly in the software business. Microsoft shares fell as low as 83 1/2 after the judge ruled in the antitrust case and have moved higher amid speculation that the Justice Department will ultimately forge a settlement with the company.
Microsoft's gains were nearly matched by Intel, another newcomer to the Dow, which rose 6 1/2, to 78-15/16. Money managers working to round out their portfolios for end-of-the-year reports are snapping up shares of the most established technology companies, which boast strong stock returns and solid earnings, analysts said.
"There are relative values within the technology arena," said David G. Sowerby, a vice president at Loomis, Sayles & Co. "Compared to some of the Internet stocks, these shares look like a bargain."
Many Internet stocks fell today. Yahoo dropped 5-9/16, to 327 1/2, and eBay lost 4 3/4, to 145-13/16.
Even in the technology sector, where companies without profits can command hefty premiums, the latest wave of earnings news moved some stocks. Oracle, which said late Tuesday that its fiscal second-quarter results beat Wall Street's expectations, rose 13-7/16, to 90 3/8. The business software maker earned 26 cents per share, 4 cents above official forecasts and a penny above the "whisper number," an unofficial prediction circulated among traders.
But Cisco Systems, a leading maker of computer networking products, fell 2-1/16, to 95 7/8. Cisco said in a routine filing with the Securities and Exchange Commission that future net sales may not match the company's historically strong growth rate.
Cisco did not change any of its earnings projections, and several analysts said the company has offered similar warnings in the past. Some analysts said the decline was simply a vote that Cisco has risen too far in the frenzy for technology stocks.
The Nasdaq has been on a tear this year, rising more than 60 percent from the end of 1998. The index has set 23 new closing records since Oct. 29, reversing course on Tuesday, when the Nasdaq dropped 86 points.
In after-hours trading, Bloomberg News reported, CMGI soared after it said it would split its shares 2 for 1. The Internet venture fund rose 30, to 229 3/4, in after-hours trading. The stock fell 6, to 199 3/4, during the regular Nasdaq session.