Reflecting strong auto sales, durable goods spending increased 11.9 percent, its biggest gain in a year. Spending on furniture and other household equipment also rebounded. Aiding the numbers was government spending that rose 4 percent.

Shares of JDS Uniphase (JDSU: news, msgs), Sun Microsystems (SUNW: news, msgs) and other bellwether technologies rebounded, as the Nasdaq Composite ($COMPQ: news, msgs) gained 40.94 points, or 2.0 percent to 2,075.82. The Nasdaq 100 Index ($NDX: news, msgs) rose 2.7 percent, while the broad S&P 500 Index ($SPX: news, msgs) added 1.5 percent.

Intel was among the most actively traded shares, rising 5 percent to $30.18. From its annual meeting, Intel executives told analysts the company is seeing stronger-than-expected sales of server-related products in Europe, a sign that overall business could soon improve. The German government on Friday lowered its growth forecast for 2001 to 2 percent from 2.75 percent.

Intel (INTC: news, msgs) highlighted plans at the meeting to get the Pentium 4 in place for the peak selling season and reiterated plans for $7.5 billion in capital expenditures this year, according to Eric Rothdeutsche, analyst with Robertson Stephens.

"The company continues to have limited visibility into orders in all market segments. However, it did see processor turns pick up at the end of the first quarter," he said

The 16-stock Philadelphia Semiconductor Index ($SOX: news, msgs) gained 5.1 percent, driven higher by shares of Intel (INTC: news, msgs), Applied Materials (AMAT: news, msgs), Novellus (NVLS: news, msgs) and Xilinx (XLNX: news, msgs).

Networking shares took a back seat only to chips, as shares of Alcatel (ALA: news, msgs), Nortel (NT: news, msgs) Lucent (LU: news, msgs) and Sycamore Networks (SCMR: news, msgs) posted gains. The Amex Networking Index advanced 4 percent.

Shares of optical-networking-gear company Corning (GLW: news, msgs) slipped 25 cents to $20.75, one of the only declining large-cap companies. The company reported a first-quarter profit Thursday of 29 cents a share, a penny ahead of the lowered First Call/Thomson Financial target. But Corning warned of a continued spending slowdown, and said it will cut 4,300 workers. The company also trimmed its full-year earnings expectations to between 90 cents and $1 a share vs. the previous target of $1.20 to $1.30 a share.

Software shares gained ground, despite Microsoft's 3 percent slide on analyst comments that the software maker will be late delivering its Windows XP consumer operating system. Some say it will reach consumers by October instead of August. Oracle (ORCL: news, msgs) and BEA Systems shares moved ahead, helping the Goldman Software Index ($GSO: news, msgs) rise 1.6 percent.

Shares of Vignette (VIGN: news, msgs), maker of Web-based customer relationship software, fell 5 percent to $6.54. The company reported a first-quarter core operating loss of $8.1 million, or a penny a share, in line with the lowered estimates. Revenue increased to $90.1 million from $55.2 million in the year-ago quarter.

One-time Nasdaq high-flier VerticalNet's (VERT: news, msgs) shares lost 5 percent after it cut 25 percent of its work force, or roughly 300 employees, Thursday as it secured $40 million in accelerated funding from Microsoft.

The results overshadowed the software and services company's first-quarter results that met Wall Street targets. See full story. 

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