Wall Street: Monday mid-session

TECHNOLOGY stocks led New York higher as optimistic reports from several Wall Street analysts lifted hopes for a pick-up in the economy and corporate profits.

IBM was at centre stage, gaining ground after Credit Suisse First Boston raised its investment rating on the computer maker. 'Everything that has been out has been positive for the economy,' said Todd Leone, head of listed trading at SG Cowen. 'IBM was upgraded. That's helping to buoy the market a little.'

The tech-packed Nasdaq index hit its highest level since March 2002, ahead 28.6 points, or 1.5%, at 1886.84 by mid-session. The Dow Jones Industrial Average rose 81.4 points, or 0.9%, to 9584.74.

IBM rose $2.45, or 2.8%, to $89.39. Merck was another leading Dow gainer, ahead $1.79, or 3.5%, to $52.79, after an article in financial magazine Barron's said pharmaceutical stocks looked attractive. Pfizer rose $1.08, or 3.5%, to $31.59.

Semiconductor equipment makers advanced after Smith Barney upgraded the sector. Applied Materials gained 90 cents, or 4.2%, to $22.24. The Philadelphia Stock Exchange's semiconductor index rose 2.4%.

Wireless-chip maker RF Micro Devices surged 12% to $10.13. It raised its quarterly forecast in another signal that the telecommunications industry may be nearing a recovery.

But retail heavyweights Wal-Mart Stores and Target were under pressure after Sanford Bernstein lowered its ratings on the companies, saying their prices already reflected the potential for better earnings.