Dow Closes Markedly Higher as IBM Surges

The Nasdaq erased its early gains on a late tumble in the tech sector.
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Helped by gains in the bonds, the stock market finished the day in positive territory, with most shares in the black. But tech stocks, buffeted by afternoon selling, ultimately didn't participate in the move.

The

Dow Jones Industrial Average

gained 107.39 to 11,107.76, driven by a surging

IBM

(IBM) - Get Report

. Big Blue climbed 19 1/2, or 9%, to 245 on the day, after a raft of analysts came out with positive comments on the company following yesterday's annual analyst meeting.

The

S&P 500

closed at 1367.56, up 3.56.

The

Nasdaq Composite

lost 24.46 to 2582.08, hit hard by that late selling in tech. It had been up as many as 24 points.

The

Russell 2000

added 1.58 to close at 450.84.

TheStreet.com Internet Sector

index fell 15.21 to 641.70.

Helped by weaker-than-expected prints on April

retail sales

and the April

Producer Price Index

, the 30-year Treasury bond climbed 1 1/32 to 92 30/32, dropping the yield to 5.75%.

On the

New York Stock Exchange

, advancers beat decliners 1,801 to 1,192 on 790 million shares. On the

Nasdaq Stock Market

, winners beat losers 2,119 to 1,834 on 1.060 billion shares. On the NYSE, 101 issues set new 52-week highs while 27 touched new lows. On the Nasdaq, 140 issues set new highs while new lows totaled 28.

On the Big Board,

America Online

(AOL)

was most active, with 18 million shares traded. Caught in the same downdraft as most of its Internet brethren, it fell 5 13/16, or 4%, to close at 132 5/8.

On the Nasdaq,

Oracle

(ORCL) - Get Report

was most active with 57 million shares changing hands. Damaged badly by the perception it would have bad things to say to analysts in its meeting after the close, it lost 2 5/16, or 9%, to 23.

Market data above are preliminary. Updated numbers and analysis will follow in the Market Round up.

3:00 p.m.: Tumble in Tech Sector Pulls Nasdaq Into the Red

Technology stocks took a turn for the worse at around 2 p.m. EDT that's dragged the entire market off its highs.

Traders were struggling to figure out what hit the techs. Though there's been some nervousness ahead of

Oracle's

(ORCL) - Get Report

analyst meeting tonight (it's thought that it won't be good), there were few stories out there to hang to fall in tech on.

"I can't see any reason for the turn," said one trader. "The feel was that everything was good. Large-cap techs were doing just fine. We're catching more stock for sale all of a sudden."

The

Nasdaq Composite

, up strongly early in the day, was off 13 to 2594. Other indices kept their heads up despite the selling. The

Dow Jones Industrial Average

was up 64 to 11,064 while the broader

S&P 500

was up 3 to 1367. The small cap

Russell 2000

was up 1 to 450. Internet stocks remain under pressure.

TheStreet.com Internet Sector Index

was down 11 to 646.

1:57 p.m.: Stocks Hover Near Session Highs

It's not enough to swing a baseball bat hard. You've got to extend your body and follow through, coaches would say. The

Dow Jones Industrial Average

and other major proxies have the "extend" part down -- the followthrough will come later.

All three major indices were just off their highs heading into the last hour of trading.

The Dow's gains come almost exclusively on the backs of

IBM

(IBM) - Get Report

and

J.P. Morgan

(JPM) - Get Report

. IBM rose 15 5/8, or 7%, to 241 1/8%, just off its all-time high of 242 7/16, reached earlier today. J.P. Morgan, meanwhile, rose 7 7/16 to 146 9/16.

Lately the industrials were up 130 to 11,130, just fractionally off the day's high. Big Blue ranks second in terms of volume today to

America Online

(AOL)

, which was lately down 2 9/17 to 135 13/16 on 11 shares traded. The

S&P 500

rose 12, or 1%, to 1376.

The tech-heavy

Nasdaq Composite Index

shrugged off flailing

Oracle

(ORCL) - Get Report

-- lately down 2 1/4 to 23 1/16 on 41 million shares -- and was lately just a few points off the day's highs. Oracle is expected to hold a meeting with analysts post-close, and it is likely to guide earnings expectations lower.

Copper Mountain

(CMTN)

, which priced its IPO this morning at 21, has put in the day's greatest percentage gain, lately up 45 1/8 points to 66 5/16.

Smaller indices, such as the

Russell 2000

and

TheStreet.com Internet Sector

index, were also faring well. The Russell was lately up 3 to 452, while TheStreet.com's index was up 6 to 663.

The

Dow Jones Transportation Average

, meanwhile, was under water, down 54 points to 3730. Antitrust suits will do that to an average:

American Airlines

parent

AMR

(AMR)

was off the day's low of 70 13/16 to 71 15/16, still down 2 3/8 after the

Justice Department

accused the company of driving smaller airlines out of its Dallas hub. Company officials fired back in the last hour, calling the allegations "unwarranted," and stating they will fight the lawsuit.

Treasuries were thriving off today's spate of inflation-friendly data. On the heels of the benign

Producer Price Index

and

retail sales

reports, the 30-year bond was lately up 1 1/32 to 92 29/32, yielding 5.75%.

--

David A. Gaffen

1:05 p.m.: Midday Musings: Market's in an IBM State of Mind at Midsession

11:59 a.m.: Bond, Tech Sector Rallies Bolster Major Indices

All major stock market proxies remain deep in the green at midday, thanks to a rebound in the bond market and strength in the tech sector, especially

IBM

(IBM) - Get Report

.

The

Dow Jones Industrial Average

, while slightly off its best levels of the day, was lately up 93, with IBM leading the charge. Big Blue, the second most active issue on the

New York Stock Exchange

after

AOL

(AOL)

, was lately up 15, or 7%, at 240 1/2, contributing a whopping 73 points to the Dow's advance. The stock made a new high of 242 3/8 earlier.

Meanwhile, the tech-laden

Nasdaq Composite Index

was up 21, despite weakness in

Oracle

(ORCL) - Get Report

, the most active issue. (See below.)

Small-cap and Internet issues remain at or near their best levels of the day. The

Russell 2000

was lately up 3, and

TheStreet.com Internet Sector Index

was up 11.

The broader market was also solidly higher. The

S&P 500

was up 7, slightly off its highs.

In the bond market, the benchmark 30-year Treasury was hanging onto a 25/32 gain in the wake of friendlier-than-expected economic data. The

Producer Price Index

, a key inflation indicator, rose 0.5% overall and 0.1% excluding food and energy in April, vs. expectations for a slightly larger overall gain. April

retail sales

were also a bit less robust than feared, rising just 0.1% overall and 0.4% excluding autos.

Tech Focus

The major tech indices are all up strongly today. The

Morgan Stanley High Tech 35

was up 1%, the

Philadelphia Stock Exchange Semiconductor Index

was up 2% and the

Philadelphia Stock Exchange Box Maker Index

was 3% higher.

Oracle, however, is suffering in advance of today's post-close analyst meeting, at which some analysts expect management to guide earnings estimates lower. (

Adam Lashinsky

has the details in his

column today.)

The 23-analyst

First Call

consensus estimate for is for fourth-quarter earnings of 33 cents a share. The stock was down 1 3/4, or 7%, at 23 5/8.

--

Elizabeth Roy

10:59 a.m.: Stellar Tech Sector Bolsters Major Indices

Broad strength remained the rule of the day on Wall Street as

IBM

(IBM) - Get Report

continued to spark the

Dow Jones Industrial Average

and inspire the rest of the tech sector.

IBM, cruising higher after a positive analyst meeting yesterday, was up 14 9/16, or 6%, to 240 1/16 and was on pace for yet another all-time closing high. That boost had the Dow up 72 to 11,072, with about 68 points of that gain coming from the Armonk Armada. The

S&P 500

was up 6 to 1370.

The tech-laced

Nasdaq Composite Index

was up 20 to 2627, with

Cisco

(CSCO) - Get Report

and

Yahoo!

(YHOO)

leading the way but

Intel

(INTC) - Get Report

not participating.

TheStreet.com Internet Sector

index was up 5 to 662, and the still-rallying

Russell 2000

was up 3 to 452.

Market internals glowed with health.

New York Stock Exchange

advancers were leading decliners 1,641 to 931 on 240 million shares. On the

Nasdaq Stock Market

, 1,881 advancers were ahead of 1,293 decliners on 339 million shares. New 52-week highs were outpacing new lows 63 to 10 on the Big Board and 87 to 14 on the Nasdaq.

America Online

(AOL)

was in its accustomed place as leader of the NYSE's most actives, up 11/16 to 139 1/8 on 6 million shares.

Oracle

(ORCL) - Get Report

was most active on the Nasdaq, down 1 15/16, or 8%, to 23 7/16 amid expectations that the company will preannounce an earnings shortfall.

--

John J. Edwards III

10:02 a.m.: IBM Rally Powers Dow

The clean pates and luxuriant locks of Wall Street have their rally caps in place this morning, at least in the tech game, with enthusiasm about

IBM

(IBM) - Get Report

helping to send major indices higher.

Coming off a strong analyst meeting yesterday, IBM was up 11 1/2 to 237 in early trading and was the

New York Stock Exchange's

biggest opening gainer.

Merrill Lynch

and

Credit Suisse First Boston

were among the firms genuflecting in Large Cerulean's direction this morning.

The

Dow Jones Industrial Average

was up 67 to 11,067, but 54 points of that was coming from Fat Periwinkle. The

S&P 500

was up 7 to 1371.

The more tech-focused

Nasdaq Composite Index

was up 23 to 2629, led by

Cisco

(CSCO) - Get Report

,

MCI WorldCom

(WCOM)

,

Yahoo!

(YHOO)

and

Amazon.com

(AMZN) - Get Report

.

TheStreet.com Internet Sector

index was up 7 to 664.

The smallish-cap

Russell 2000

was up 3 to 452.

The bellwether 30-year Treasury bond was up a strong 22/32 to 92 19/32, its yield easing to 5.78%.

Most Up at Open -- Nasdaq

CMGI (CMGI) , up 5 5/8 to 245 3/8

: The company formed an alliance in which

Gateway

(GTW)

will take a $200 million stake in CMGI.

Most Down at Open -- NYSE

Caterpillar (CAT) - Get Report, down 1 to 59 3/4

.

Most Down at Open -- Nasdaq

Immunex (IMNX) , down 5 5/8 to 133 13/16

: The stock soared yesterday on word that Immunex will seek expanded uses of its

Enbrel

drug for rheumatoid arthritis.

--

John J. Edwards III