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Wall Street Ends Week With Rally - 2001-08-24

Wall Street saw a strong performance across the board. The Dow Jones Industrial Average ended the day with a gain of nearly 2 percent at 10,423. The technology-driven Nasdaq climbed 4 percent to 1,917. And the Standard and Poor's 500 index ended trading up by almost 2 percent at 1,185.

The reason for the surge was an announcement from Cisco Systems. The global leader in computer networking equipment says it thinks the worst may be over for the tech sector. It said new sales are beginning to match expectations again. Cisco's positive outlook was enough to spark off the rally.

In addition, there was more good news for the U.S. economy. New home sales in the country were up sharply in July. According to the Commerce Department, new sales climbed 4.9 percent. That was considerably higher than what Wall Street expected. The numbers show that even in the midst of the economic slowdown, this crucial area of the economy continues to perform well.

The announcement from Cisco helped companies in related fields, such as the semiconductor industry. Joe Osha of Merrill Lynch says Cisco's analysis appears credible. But he adds that this does not mean there will be a rapid recovery.

"I think we're close to a bottom in the semiconductor business. It's going to be a rocky bottom," said Mr. Osha. "I think people looking for a rapid re-acceleration are going to be disappointed. But I don't think the business is going to get dramatically worse, either. So, investors are starting to figure that out."

Another of the prominent movers on Wall Street for the day was Microsoft. Shares in the company climbed sharply, at one point by as much as 5 percent. Analysts say there are two reasons for this. The software giant is preparing to release its newest operating system, Windows XP. In addition, there are new developments in the antitrust case against Microsoft. The U.S. Court of Appeals has sent the case back to a lower court and a new judge has been appointed. Those two factors led investors to buy into the company and send shares higher.

Elsewhere, the dollar closed out the week higher against the euro, the British pound, and the yen.