World stocks: Bargain hunters go shopping on Nasdaq

NEW YORK - Technology stocks rallied yesterday, with investors moving out of defensive "old-economy" shares in a gamble that interest-rate cuts would revitalise the troubled high-tech sector.

The tech-rich Nasdaq composite index gained 82.88 points (3.39 per cent) to 2524.18 after a late bout of buying.

Milton Ezrati, a senior economist and strategist at Lord Abbett, said the buy-up was caused by a feeling that the stocks were "more reasonable than people have seen for years - and that is a tremendous temptation."

The Dow Jones average index gained 31.72 points (0.30 per cent) to 10,604.27, after gains for its technology components helped it to post its first positive close in five trading days.

The broader Standard and Poor's 500 composite index rose 12.47 points (0.96 per cent) to 1313.27.

Investors snatched up what they saw as bargains in the beleaguered high-tech sector, including software companies Microsoft, Oracle and Veritas Software.

The Nasdaq's rise, however, coming after heavy volume of 2.4 billion shares, was far from smooth.

The index fell more than 2 per cent at the opening and then slipped again in noon trading, weighed down by leading Internet-gear maker Cisco Systems.

Many market players expect the United States Federal Reserve to cut interest rates again at its next policy-setting meeting at the end of this month, further reducing corporate America's borrowing costs. Such a move would boost the market.

In London, the leading share indicator closed lower for a third day after a profit warning from aerospace group BAE Systems dampened sentiment and the market braced for key United States earnings news.

The blue-chip FTSE-100 index closed 27.5 points (0.45 per cent) lower, at 6060.60. BAE's 24.6 per cent drop alone wiped 11 points off the Footsie