US technology stocks rose on Monday, pushing the Nasdaq Composite Index to its highest close in nearly two years, as software maker Siebel Systems Inc forecast higher-than-expected profit for the fourth quarter.
Blue chip stocks also rose, sending the Dow Jones industrials and broader Standard & Poor's 500 to their highest in more than 20 months as investors streamed back from the holidays to pump money into the market on expectations of another solid year on Wall Street, starting with a strong fourth-quarter earnings reporting season.
"There is a belated reaction to some strong forecasts issued over the past few weeks," said Christine Callies, chief market strategist at money manager Bessemer Trust.
"There is an ongoing rotation into technology," fuelled by evidence of better cash flows at industrial and manufacturing companies, she added, which should lead to increased spending on technology.
The technology-focused Nasdaq Composite Index closed up 40.68 points, or 2.03 percent, at 2047.36, its highest close since January 8, 2002.
The Dow Jones industrial average ended up 134.22 points, or 1.29 percent, at 10,544.07, its highest close since March 2002. The broader Standard & Poor's 500 Index finished up 13.74 points, or 1.24 percent, at 1,122.22, its highest close since April 2002.
Volume was heavy as investors returned in force after two weeks of holidays and half-sessions. Nearly 1.6 billion shares changed hands on the New York Stock Exchange and more than 2.3 billion on Nasdaq. Advancers beat decliners by about 2 to 1 on both the NYSE and Nasdaq.
Siebel led the charge higher as it sounded a bright note before the earnings reporting rush, which starts later this week.
The company said fourth-quarter revenue and profit would surpass its previous forecast, helped by higher license revenue. Siebel shares jumped $1.40, or 10 percent, to close at $15.39.
Chip shares also rose after the World Semiconductor Trade Statistics group said global sales of semiconductors surged to $16.1 billion in November, rising 25.7 percent from a year ago and accelerating for the fourth straight month.
The Philadelphia Stock Exchange semiconductor index jumped 3.6 percent.
Intel Corp, the world's largest maker of computer chips, rose 75 cents, or 2.3 percent, to $32.91.
SG Cowen boosted its ratings on several technology names, including computer maker Dell Inc, software maker Microsoft Corp and chip equipment maker Applied Materials Inc, to "strong buy" from "outperform."
Dell advanced 93 cents, or 2.7 percent, to $35.22. Microsoft gained 69 cents, or 2.5 percent, to $28.14. Applied Materials added $1.42, or 6.4 percent, to $23.52.
Wall Street got more evidence of a strengthening economy early in the day. Construction spending advanced a surprisingly strong 1.2 percent in November to a fresh record high, a government report showed, as persistently low mortgage interest rates spurred an unprecedented rate of building. The forecast was for a gain of 0.5 percent.