A plunging long-bond yield gave stocks support Thursday and Amazon's fourth quarter earnings fueled tech shares as the Nasdaq composite charged up 137 points to 4,210.92, its third-largest, single-day gain.
The Dow Jones industrial average added 10 points to close at 11,013.44 after falling more than 150 points in early trading.
A surging bond market provided support for stocks. Treasury prices soared for the second consecutive day following the U.S. Treasury Department's announcement Wednesday that it will issue less debt than expected and begin buying its outstanding securities. The 30-year Treasury bond shot up 1 27/32, knocking the yield down to around 6.15 percent. For a day, bonds were looking like Internet stocks. The bond movement put the lid on interest rates and juiced Net stocks.
"The move in bonds is the most humongous I've ever seen. It indicates that there is a problem somewhere. Hedge funds are getting murdered and we don't know that it's over. I suspect there is something at work that is not totally in the public's eye yet,'' said Alan Newman, technical analyst at H.D. Brous & Co.
In other economic news, orders at U.S. factories rose at the fastest pace in seven years this December, according to data in a Commerce Department report. Orders at U.S. factories jumped 3.3 percent, well above the 0.6 percent gain economists had expected.
Amazon.com Inc. (AMZN) got the Internet sector off to a strong start, surging up 14 3/4 to 84 3/16 after several analysts upgraded the stock falling its fourth-quarter earnings miss.
Yahoo! Inc. (YHOO) hustled up 32 1/4 to 360 1/4 while eBay Inc. (EBAY) and Lycos Inc. (LCOS) added 14 and 1 3/16 a share, respectively. Excite@Home Corp. (ATHM) fell 1 to 37 and America Online Inc. (AOL) shed 7/8 to 60.
Alamosa (APCS) jumped 11 3/16 to 28 3/16 in its initial public offering. Centra Software Inc. (Nasdaq: CTRA) gained 19 1/4 to 33 1/4 in its debut.
Digex (Nasdaq: DIGX) closed up 11 9/16, eBookers.com (Nasdaq: EBKR) picked up 2 3/8 to 24 1/8 and ION Networks (Nasdaq: IONN) rose 7/16 to 30 1/2 after topping First Call estimates.
Among widely held PC stocks, Dell Computer Corp. (DELL) added 3/8 to 38 1/2; Compaq Computer Corp. (CPQ) gained 1/2 to 28; Gateway Inc. (GTW) shot up 3 11/16 to 63 7/16 and Apple Computer Inc. (AAPL) closed up 4 1/2 to 103 5/16.
Storage Technology Corp. (NYSE: STK), a struggling maker of data storage equipment, fell 2 3/4 to 12 15/16 after it said it expected to post a fourth-quarter loss excluding restructuring charges, plans to cut additional jobs and announced that its chairman and chief executive had resigned.
VA Linux (Nasdaq: LNUX) slid 8 7/8 to 128 after it said it will purchase Andover.net (Nasdaq: ANDN), a network of Linux community sites, in a stock and cash deal to become the Yahoo! for the open source crowd.
Microsoft Corp. (MSFT) hustled up 2 13/16 to 103 5/8 while Oracle Corp. (ORCL) and Sun Microsystems Inc. (SUNW) tacked on 2 3/8 to 2 1/2 a share, respectively.
Intel Corp. (INTC) continued its strong run, gaining 4 3/16 to 104 3/16 while Advanced Micro Devices Inc. (AMD) closed up 2 15/16 to 39.