Tech Leads Stock Surge

Updated from 4:20 p.m. EDT

Stocks surged Wednesday as tech buyers cheered a strong earnings report from Cisco (CSCO Quote) and investors shook off some jitters about the credit markets.

The tech-heavy Nasdaq Composite jumped 51.38 points, or 2.01%, to 2612.98, bolstered by Cisco's earnings beat and strong outlook.

The other major averages rebounded from a late bout of volatility and ended solidly higher. The Dow Jones Industrial Average, which briefly plunged into negative negative territory in the last hour of trading, rose 153.56 points, or 1.14%, to 13,657.86. The S&P 500 added 20.78 points, or 1.41%, to 1497.49.

For the market, it represented the third straight day of gains after a massive selloff last week.

After the prior session's closing bell, Cisco posted profit and revenue figures that beat the Thomson First Call mean estimates. The networking-gear maker also raised its revenue guidance for the first quarter.

Bear Stearns upgraded Cisco to outperform from peer perform after the report, and the stock surged $1.99, or 6.7%, to close at $31.68.

"Cisco's news really gave us positive momentum," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "Even with the late day jitters from rumors, which gave us a lot of volatility, there is still money on the sidelines and there are some opportunities. No one wants to be left behind."