Tech stocks lead US rally

Investors sent technology issues higher for a second straight session today despite worries about Cisco Systems.

The Dow Jones industrial average closed up 31.72 at 10,604.27, after spending most of the day in negative territory.

The Nasdaq composite index, more heavily weighted in technology, rose 82.88 to 2,524.18. The Standard & Poor's 500 index gained 12.47 to reach 1,313.27.

Blue chips rallied modestly late in the day, ending a four-day losing streak.

Analysts said the advances could be an indication that market conditions are improving, but they said the reaction to the Yahoo! and Motorola results, due out later today, would be a better test.

Earnings remained a focus, particularly for hi-tech stocks that some consider to be trading at too high prices.

Cisco Systems tumbled in heavy trading after its stock was downgraded and the company's chief executive hinted at trouble ahead.

But Cisco's bad news did not pull the entire market lower. Investors traded Yahoo! up, extending the previous session's gains, despite concerns that a fall in advertising because of the weak economy will hurt the web portal.

Motorola also rose despite spending most of the session down.

Investors had a lukewarm reaction to news that American Airlines parent AMR would purchase most of TWA's assets for $500m. AMR fell, its second day of losses. TWA has not been traded on the American Stock Exchange since Monday.