US computer-related stocks receive timely boost with Oracle Corp move

US COMPUTER-RELATED stocks rose after Oracle Corp raised its offer for software maker PeopleSoft Inc and Lehman Brothers Inc boosted its rating on three semiconductor makers.

The Standard & Poor's 500 Index pared early losses as investors snapped up shares to extend a three-month rally that has lifted the benchmark by 26% since March 11.

Stocks have rallied on expectations of faster economic and profit growth in the second half of the year.

People are "buying on every dip", said Michael Palazzi, head of Nasdaq trading at SG Cowen Securities Corp.

"There is a fear factor going on here. There are a lot of people who have missed this rally, people who are struggling for performance."

The Nasdaq Composite Index, which gets 42% of its value from computer-related companies, added 9.23, or 0.6%, to 1677.77 as of 12.33pm in New York.

The S&P 500 shed 0.77, or 0.1%, to 1010.89. It had been down as much as 0.7%.

The Dow Jones Industrial Average slipped 40.48, or 0.4%, to 9282.61.

Eastman Kodak Co led the decline after the world's largest maker of photographic film reduced its earnings forecast by more than half.

Three stocks dropped for every two that rose on the New York Stock Exchange.

Some 742 million shares traded on the Big Board, a 5% increase over the same time a week ago.

PeopleSoft Climbs PeopleSoft climbed 94 cents to $18.09 after Oracle raised its offer for the business-software maker to $6.3bn cash.

The bid values PeopleSoft at $19.50 a share, up from the original $16. PeopleSoft tried to stop Oracle's bid by revising its plan to buy J.D. Edwards & Co.

Oracle rose 13 cents to $13.48. J.D. Edwards added 22 cents to $14.11.

"The fact that Oracle was not able to get PeopleSoft on the cheap is a positive development, and does show we're seeing more optimism toward technology stocks,' said Sally Anderson, money manager at Kopp Investment Advisers.