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Stocks ended July with a nice rebound, though it did little to soothe the memory of what went on in the last week of the month.


Nasdaq ended the day up 103.99 points, or 2.8%, at 3766.99 in what technical analysts claimed was a bounce from oversold conditions. Internet Sector

index finished up 27.19, or 3.9%, at 726.36.

The bounce came after the Nasdaq dropped more than 400 points last week. Traders looking for bargains likely did some bottom fishing after last week's drop. Shorts also may have covered positions when the market showed it was rebounding, and likely contributed to the late spurt that left the Nasdaq at its highs on the close.

Barry Hyman, senior market analyst with

Ehrenkrantz King Nussbaum

said the rally was not overly impressive to him as gains were not widespread through the technology sector. Hyman said he did not look at recent events any differently than he has much of the year, buying weakness and selling strength, though he was staying away from technology stocks.

"It's a tough environment. It's creating a lot of volatility without much movement and that means it's a tough investing market," he said.

Hyman said he was standing pat in technology stocks "because there's confusion, and seasonality does not suggest making a commitment." He said August is not typically a good month, with many investors taking off for holiday. But Hyman said he does not expect the Nasdaq to break significantly below the 3500 level. He said he has not seen any fear in the market yet or evidence of margin calls, and he would be looking to get in on another break lower. Hyman said he sees upside to the 4000 or 4100 level at best.

For now, Hyman said he was nibbling on some telecommunications stocks like





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, while also buying

USA Networks

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. Common denominator for all three stocks is that Hyman likes the heads of those companies. He also mentioned

Infinity Broadcasting

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in the media sector.

Hyman also said he was "intrigued" by

Akamai Technologies

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, though he was not buying yet. Akamai has gotten pummeled in the last week over concerns about release of lockup restrictions. On Aug. 1, 2.8 million shares held by insiders will be available for lockup release, while more than 58 million will be available for release on Sept. 13. Hyman said he would be looking for an opportunity to buy the stock in the low 70s to mid-60s, though he stressed that he was not looking for Akamai to be a long-term play, just a short-term trade. Well-aware of the lockup, Hyman said he has seen overhangs on stocks before, but "it doesn't mean that everything is going to be sold." Akamai ended today up 15/16, or 1.2%, at 78 7/8.

2:28 p.m.: Big Tech Rally Has Bulls Cheering, Technicians Quizzical

Buy the bounce, or sell into it? That's what investors were asking as the market showed some signs of life today.

The Nasdaq was up 60, or 1.6%, to 3723 in recent trading, having risen as high as 3751.76. The market was rebounding after dropping precipitously last week, with some short sellers getting squeezed from their positions.

Dick Dickson, technical analyst with

Scott & Stringfellow

in Richmond, Va., who gets paid for analyzing days like today, notes that short-term technical indicators suggested an oversold bounce, "but beyond that's there's not much evidence to support a rally." More distressing, he notes that after a near-term bounce, the market should see a further correction.

Dickson contends that seasonal patterns suggest the market trades lower. He sees key support for the Nasdaq coming in at the 3370 level, with initial support coming in at 3580. That's the bottom of the gap the market left from June 1, when it closed at 3583 (he rounded down), then gapped open to 3729 the following day.

Dickson expects further damage in the techs over the intermediate term, especially in the stocks that have held up best so far, largely in the networking, optical fiber, semiconductor and software groups.

But that's in the intermediate term. What was going on today? A nice little rally, with infrastructure and business-to-business stocks performing the best.

Among the day's gainers,



was up 7%. No news out on the company, but's

own Cory Johnson had a positive take on the Internet search technology company in a column that ran earlier on




After a second look at its purchase of

Abatis Systems

, shares of

Redback Networks


were up 1.4%. The networking firm had traded as low as 112 earlier in the session. Also,

Juniper Networks

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, which makes high-speed routers, was up 4%, while

Copper Mountain Networks


, which provides high-speed digital subscriber lines, was up 3.7%. Networking equipment maker

Foundry Networks


was up 6.7%.

Among B2B plays,



, an electronic commerce operator, was up 6.5%,



, which makes customer relationship management software, was up 6.7%; and business software firm



was up 4.9%.

Not participating in the B2B rally was



, which was down 9.7%. The company, whose Web-based software allows small and medium-sized businesses to buy and sell goods over the Internet, The company announced on Monday that it was opening a new, $5.9 million data center to help manage its growing customer base. But Wall Street saw the move as building when PurchasePro could have bought. Many tech firms outsource their technology and Internet hosting needs to companies such as

Exodus Communications


, believing the strategy is more efficient and cost-effective than developing and maintaining such data centers in house.

Elsewhere on the downside, shares of



were off 4.4%. The online advertising company rallied Friday on news that the

Federal Trade Commission

approved guidelines for privacy standards for advertising networks. But as our own George Mannes points out in an earlier

story, privacy advocates still have concerns about their online rights.

10:20 a.m.: Bulls Look to Stay in Their Pens Ahead of Friday's Jobs Data

Watching the gains in the

Nasdaq futures slowly evaporate before the open today suggested it wasn't going to be easy to get traders to be interested in going long, even after last week's setback.

In recent trading, the Nasdaq Composite was down 44 to 3616 after trading as high as 3695.75 early on. Internet Sector

, or DOT, index was down 8 to 690. There are any number of reasons to not get bulled up this week. Supply will definitely be a factor with more than 50 IPOs and/or secondary offerings on the docket. In addition,

economic data will be a focus much of the week, concluding with the

employment report

on Friday. But the market is considered oversold after last week and is expected to see an oversold bounce sometime this week.

Ahead of the opening, Bill Meehan, chief market analyst for

Cantor Fitzgerald

, suggested that traders take advantage of gains in the market to get out of long positions or establish shorts.

In his morning note, Meehan wrote that "investors should use rallies as opportunities to lighten up, move into more defensive areas or put on hedges. Aggressive traders should continue to look for shorts, especially in the tech sector." He goes on to say that the technical damage in the market "has been great, and it looks as if the July highs marked a secondary top that was nothing more than a bear market rally. For yet another year it looks as if there ain't no cure for the summertime blues; and it could get very ugly in the months ahead."

Among stocks in the news

Juno Online Services


was up 22.3% on

news that it had reached an agreement with

Time Warner


to offer high-speed Internet access over Time Warner's cable network. The deal comes as Time Warner faces pressure from regulators scrutinizing its merger plans with

America Online


to open its cable network to Internet service providers.


(QCOM) - Get Qualcomm Inc Report

was up 1.9% on a report that it will help bring wireless technology to


(F) - Get Ford Motor Company Report

vehicles. The joint venture, which is known as Wingcast, will put services such as mobile phone, Web access and entertainment into Ford autos.

covered the

story earlier this morning. Ford shares were modestly higher in early action.


Redback Networks


was down 6.5% on news that the networking firm would acquire

Abatis Systems

, a privately held firm whose tools help companies deploy Internet Protocol services. Under terms of the agreement, Redback will issue around 5.2 million shares of stock for Abatis, placing a value of the deal at $636 million before trading began today.