MARKET CLOSE: Mixed signals keep investors on edge

U.S. stocks went on a wild ride Thursday as the Dow Jones industrial average fell 99 points in early trading only to rally up more than 100 points for a short time. In the end, it closed up 54 points while the Nasdaq inched up 6 points to 2,806.84.

Right now, the market's torn between the pessimism of possible interest-rate hikes down the road and the generally strong earnings reports this week from leading blue-chip and technology stocks.

"There is still the opinion that you should be buying the dips and not taking yourself out of the market," said Jere Estes, senior vice president at Investment Counsellors of Bryn Mawr.

First-time claims for state unemployment insurance benefits fell to 285,000 for the week ended Oct. 9 from 314,000 in the prior week, well below Wall Streets' forecast for 300,000.

Apple Computer (Nasdaq: AAPL) shares surged up 9 5/32 to 73 3/16 after the company issued a bullish outlook for its fiscal first quarter and analysts responded with upgrades.

Gateway Inc. (NYSE: GTW) rose 3 7/8 to 55 3/16 as it joined the groups of PC makers rushing to embrace a new look, unveiling an all-in-one PC priced at $799.

International Business Machines Corp. (IBM) added 1 13/16 to 106 7/8. Dell Computer Corp. (DELL) trimmed 3/32 to 44 11/32 and Compaq Computer Corp. (CPQ) shaved off 3/8 to 22.

Intel Corp. (Nasdaq: INTC) closed up 1 7/32 to 73 11/32 after announcing it is branching out into cellular chips with its acquisition of DSP Communications, Inc. (NYSE: DSP) for $36 a share in an all-cash tender offer valued at around $1.6 billion. DSP shares closed up 6 15/16 to 34 15/16.

Chip equipment maker KLA-Tencor (Nasdaq: KLAC) shed 1 5/16 to 72 5/8 despite delivering the latest round of good news for the sector Thursday with fiscal first quarter earnings of 38 cents a share. The results beat First Call estimates by a nickel.

Internet stocks enjoyed a decent day as well, led by Yahoo! Inc. (YHOO), which closed up 5 13/16 to 173 3/8. America Online Inc. (AOL) rose 3 13/16 to 114 7/8 and Lycos Inc. (LCOS) tacked on 5/8 to 59 1/16. Excite@Home Corp. (ATHM) added 5/16 to 43 1/8 and Amazon.com Inc. (AMZN) closed off 11/32 to 79 19/32.

Priceline.com (Nasdaq: PCLN) closed off 2 1/4 to 70 after it filed suit against Microsoft Corp. (Nasdaq: MSFT), down 13/16 to 90 1/4 Wednesday, saying the company's Expedia.com travel site has launched a "copycat hotel service" that violates Priceline patents.

Computer services supplier Unisys Corp. (UIS) plunged 15 1/2 to 26 3/4 after it posted better-than- expected profits in the third-quarter due to continued financial restructuring moves but reported revenue growth was slight.

Microsoft Corp. (MSFT) fell 3/8 to 90 11/16 and Oracle Corp. (ORCL) shaved off 21/32 to 46 25/32. Sun Microsystems Inc. (SUNW) inched up 1/32 to 89 13/32 ahead of its first-quarter earnings report.