Midday Report: Nasdaq, Techs Gain on GDP Growth

Nasdaq stocks were on the rise at midday Friday, after a U.S. government report showed that the economy grew at a faster-than-expected pace in the first quarter due to a rise in consumer spending.

Upbeat outlooks from software companies, including VeriSign (Nasdaq: VRSN) and Art Technology (Nasdaq: ARTG), also gave heart to investors looking for signs that business may be picking up in the technology sector.

At midday, the Nasdaq Composite Index was up 32.74 at 2,067.62, led by gains in Cisco (Nasdaq: CSCO), up 4 cents at $15.25, and Intel (Nasdaq: INTC), up $1.04 at $29.68.

Dell (Nasdaq: DELL) was 44 cents higher at $25.76. Oracle (Nasdaq: ORCL) was up 12 cents to $17.02.

The Standard & Poor’s 500 stock index was up 10.35 at 1,244.87, and the Dow Jones Industrial Average was up 66.04 at 10,758.39.

The U.S. Department of Commerce said that gross domestic product (GDP) grew at a 2 percent annual rate in the first quarter, up from 1 percent in the fourth quarter and faster than the 1.1 percent expected by economists.

The government said that a pickup in consumer spending was largely responsible for the increase.

E-Commerce Evens Out

The E-Commerce Times Index was up 0.62 percent at midday, with a 19 percent jump in Barnesandnoble.com (Nasdaq: BNBN) offsetting a drop in Amazon.com (Nasdaq: AMZN).

Barnesandnoble.com was up 39 cents at $2.45, after the online bookseller said its loss narrowed in the first quarter. Prudential Securities upgraded Barnesandnoble.com shares to hold from sell after the report.

Amazon, meanwhile, was down 35 cents at $15.07. eBay (Nasdaq: EBAY) was up 39 cents to $46.40.

Software Gains

Strong earnings lifted shares of some software makers. VeriSign, which provides Internet security software and registers domain names, jumped $5.02 to $51.24 after reporting a 526 percent increase in revenue for the first quarter.

The company also announced plans to buy back up to $350 million of common stock.

E-commerce software maker Art Technology (Nasdaq: ARTG) gained 23 cents to $8.12, after reporting first-quarter results that topped its weak expectations and announcing a plan to cut costs.

Acquisition Lifts Compaq

Internet consulting company Proxicom (Nasdaq: PXCM) rose $1.32 to $5.65, after Compaq (NYSE: CPQ) said that it would buy the company for $266 million in cash.

Compaq, up 63 cents at $17.63, said the purchase would further its goal of increasing the amount of revenue it gets from services.

Software maker VA Linux (Nasdaq: LNUX), meanwhile, fell 15 cents to $2.88, after lowering its outlook for the quarter ending this month because of a continued slowdown in spending on information-technology products.

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