Nasdaq and Dow climb at close
Tech stocks bounce back from midday declines, while old-economy stocks keep chugging higher throughout the day.
After dropping more than 70 points, the Nasdaq composite index battled back to close up 67.27, or almost 2 percent, to 3,523.10. The Standard & Poor's 500 index climbed 7.86 to 1,434.32 after falling lower in early trading.
The Dow Jones industrial average rose to a high of 10,849.59 but closed at 10,784.48, up 64.74, led by International Paper, which gained $1.88 to $31.50.
"I'm encouraged, but we're not out of the woods yet," said Todd Clark, head of listed trading at WR Hambrecht.
Clark noted that more stocks declined than advanced on the Nasdaq, which is not a sign of a strong market. Losers also outnumbered winners on the New York Stock Exchange, which generated an active volume of 2.16 billion shares compared with the surging 2.12 billion share volume on the Nasdaq. It was the Nasdaq's 10th-highest volume day ever.
Clark noted that the high volume was not accompanied by any strong leaders in today's trading, which led him to believe that gains might have been a "trading type of bounce"--based on volume instead of fundamentals.
At the end of regular trading, Intel closed up $1.69 at $42, while Microsoft fell $1.13 to $55.44. Cisco Systems rose $2.31 to $58.56, and Sun Microsystems gained $3.08 to $111.45.
Oracle fell $1.38 to $68.13, but the positive market mood helped the stock come back from its low of $60.50. Volume topped 102 million shares, more than five times the stock's average daily volume, making it the most actively traded stock on the Nasdaq.
Robertson Stephens cut its rating on the software maker to long-term "attractive" from "buy." Analyst Eric Upin cited concerns about slowing sales of Oracle's flagship database software, which lets companies manage large reams of information.
Upin said Oracle stock--one of only six large-cap tech companies with price-to-earnings ratios in excess of 100--isn't likely to rally much as sales growth slows.
"The stock is richly valued following Oracle's phenomenal stock run over the past two years," Upin wrote in a report. "It's difficult to make an argument for the stock to move meaningfully higher over the near term."
The CNET tech index gained 81.46 to close at 2,832.38. Winners stomped all over losers for a change, with 73 of the 97 stocks in the index rising and 24 falling.
Of the 18 sectors tracked by CNET Investor, makers of semiconductors and semiconductor equipment posted the sharpest gains, rising 4 percent and 5 percent, respectively. Computer-aided design and manufacturing companies were the day's biggest losers, slipping almost 2 percent.
The Philadelphia semiconductor index rose 50.11, or 6 percent, to 863.06, led by chip equipment maker Novellus, which gained $5.88 to close at $47.75.
The initial public offering (IPO) of Oplink Communications, a maker of fiber-optic components, was the largest percentage gainer on the Nasdaq. The shares rose $15.63, or nearly 87 percent, to $33.63.
Among members of the CNET tech index, Computer Associates International rose $3.63, or nearly 15 percent, to $28.06, despite an earnings warning issued yesterday.
The software maker announced that it expects to report fiscal second-quarter earnings that fall short of the average forecast of analysts.
But analysts' upbeat outlook today on the company's third-quarter profit helped the company tread water.
Investors were not as kind to Knight Trading Group, the largest Nasdaq Stock Market middleman. Shares of the market maker fell $3.69, or 11 percent, to $28.50 after the company said third-quarter earnings unexpectedly declined by as much as 41 percent because of a slowdown in stock trading.