Wall Street Beat: IT leads market rally

Are shares of IT vendors set to rise again? Fueled by strong sales reports from Lenovo and NetApp, tech stocks led a broad market rally Thursday that was generally ascribed to news about China's confidence in Europe, which faces a debt crisis in Greece and other Mediterranean countries.

Despite good, even record-breaking quarterly sales reports from IT vendors over the past few months, worries about the economy have depressed tech shares lately. Even after the tech-heavy Nasdaq closed Thursday at 2277 -- up by 82 points or 3.7 percent for the day -- the exchange was 258 points off its 52-week high, set on April 26.

The European debt crisis has been at the heart of recent concerns about the ability of the world's economy to sustain the recovery from the Great Recession, but the U.S. economy is not considered to be out of the woods yet, either. The U.S. Labor Department Thursday reported that initial claims for unemployment dropped last week, but not to the extent that some economists had expected, and a Commerce Department report on the U.S. gross domestic product was not as positive as had been hoped for.

Still, the news that Chinese officials said they will hold on to the European debt they hold seemed to calm fears about the global economy, and positive reports from the IT sector gave an extra boost to tech shares.

Apple shares jumped US$9.24 to close at $253.35 Thursday, a day after the company earned the distinction of beating Microsoft out as the IT vendor with the highest market capitalization in the world: In other words, investors have more money in Apple shares than in any other technology company.

The investor confidence is a testament to Steve Jobs' direction of the company, which over the past decade has revolutionized the music market with the iPod, shaken up the mobile-phone sector with the iPhone and energized the tablet arena with the iPad.