Stocks End Quarter With Moderate Advance

Updated from 4:34 p.m. EDT

Stocks in New York rebounded a bit on the last day of the first quarter, closing out a positive month, with banks and tech leading the way.

The Dow Jones Industrial Average climbed 86.90 points, or 1.2%, to 7608.92, and the S&P 500 gained 10.34 points, or 1.3%, to 797.87. The Nasdaq Composite rose 26.79, or 1.8%, to 1528.59. All three indices ended well below their session highs.

However, for the month just ended, the Dow rose 7.7%, the S&P added 8.5%, and the Nasdaq gained 10.9%. For the year, they are still off by 13.3%, 11.7%, and 3.1%, respectively.

Bank of America(BAC Quote) and Citigroup(C Quote), which declined sharply on Monday, rallied. BofA rose 13.1% to $6.82, and Citi was up 9.5% to $2.83.

Intel (INTC Quote) and IBM (IBM Quote) shares were up 2.1% and 2.5%, while Microsoft (MSFT Quote) added 5.1% to $18.37.

Some of the volatility still suggests the market is seeing a bear market rally, says Jim Holtzman, a financial adviser with Legend Financial, adding that many analysts believe the latest run-up has been largely dictated by short-covering.

"There's no real way to quantify if it's what's happening, but that again would be indicative of a bear market rally and we don't see it being sustainable in terms of what's happened so far," he says.

"If the recent advance we had is to be more than an oversold-short-covering bounce, the market will have to be able to overcome confusion and bad news," writes Vince Farrell, chief investment officer at Soleil Securities and a RealMoney.com contributor, in recent commentary. "Markets that go up in the face of bad news are markets that have some length to them."