Market Update: Dow, Nasdaq Both Close With Triple-Digit Gains - TheStreet

The

Dow Jones Industrial Average and the

Nasdaq Composite Index were basically unstoppable all day and finished on very strong notes.

Even though this week's been riddled with earnings warnings and other bad news, investors seemed to have dipped their toes into the market, liked the temperature and then jumped in with both feet today.

The Nasdaq rose despite a negative note from

Sanford Bernstein

on

Cisco

(CSCO) - Get Report

and

Nortel

(NT)

. The firm cut both stocks to market performs from outperforms.

Merrill Lynch

countered the note by reiterating its buy ratings on both stocks. Cisco bounced back and ended up 3.5%, and Nortel was 5.7% higher.

Larry Rice, chief investment strategist at

Josephthal

, said the reason for the ballyhoo over the stock is because analysts are uncertain. "They've been stung on a lot of high-tech stocks lately," he said. Analysts are facing more pressure to know what's going on, he added, and an upcoming change in disclosure rules will only exacerbate that pressure.

Rice switched gears to talk about the markets actions this week. He said the market oversold earlier this week largely because of

Eastman Kodak

(EK)

; but he also said September is historically a bad month and that the market typically for n quarter's end.

The Internet sector made a strong comeback today after

J.P. Morgan

made positive comments on it. The firm said yesterday's selloff was unwarranted. Internet stocks had a lousy session yesterday after

priceline.com

(PCLN)

warned of an earnings miss.

Morgan was bullish on

America Online

(AOL)

,

eBay

(EBAY) - Get Report

and

Yahoo!

(YHOO)

, which rose 1.9%, 8.9% and 5.9%, respectively.

Meanwhile, the Dow had only six detractors; among the winners were

Hewlett-Packard

(HWP)

,

Procter & Gamble

(PG) - Get Report

and

J.P. Morgan

(JPM) - Get Report

were the Dow's rising stars, each adding more than 20 points. Procter was getting a lift after it said this morning that it thinks double-digit EPS growth on the year is achievable. Procter was up 8.4%.

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Sector Watch

Financials, semiconductors, biotech and box-makers rallied, while gold and energy stocks lagged.

Financial stocks showed strength, with the

American Stock Exchange Broker/Dealer Index

up 3.5% and the

Philadelphia Stock Exchange/KBW Bank Index

2.7% higher.

Goldman Sachs

(GS) - Get Report

and

Morgan Stanley Dean Witter

(MWD)

were two of the biggest boosters in the broker sector, while

Bank of New York

(BK) - Get Report

and

State Street Bank

(STT) - Get Report

were buoying banks.

Other sectors were a mixed bag of winners, with the

Philadelphia Stock Exchange Semiconductor Index

lifting 4.3%. The

Nasdaq Biotechnology Index

was up 3.2% and the

Philadelphia Stock Exchange Computer Box Maker Index

rose 4.2%.

The

Philadelphia Stock Exchange Gold and Silver Index

wasn't getting much love and was down 2.4%.

The energy stocks also gave up some gains. The

American Stock Exchange Oil & Gas Index

was off 1.1%, and the

Chicago Board Options Exchange Oil Index

was 1.2% lower.

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Bonds/Economy

Treasuries were narrowly mixed despite upward revisions to the

Consumer Price Index

(

definition |

chart |

source

), which were forecast

yesterday.

The

Bureau of Labor Statistics

this morning announced that in each month from January to August, the CPI was 0.1 higher than originally reported, except in May and July, when it was higher by 0.2. From January to August, prices rose 3.5%, revised from 3.4%, and the core prices -- which exclude food and energy -- rose 2.7%, revised from 2.6%, the BLS said.

The BLS revised the CPI after discovering that a software error led to miscalculations.

The benchmark 10-year Treasury note lately was unchanged at 99 14/32, yielding 5.825%.

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