(Updated from 4:08 p.m.)

The market turned around in the last half-hour of trading after suffering all day from an early morning surprise profit warning from mobile-phone maker


(NOK) - Get Report

. A late-afternoon recovery pushed major indices up to close higher.


Nasdaq Composite closed basically flat at 2170 after having been down earlier as much as 65.4 points, or 3%. The

Dow Jones Industrial Average, which had been notching triple-digit losses, closed up by 26.3 points, or 0.2%, to 10,948. The

S&P 500 gained 1.5 points, or 0.1%, to close at about 1256.

One trader said the late rally was due to short-covering. The rising tide didn't lift all boats, however. Nokia sank 18.98% to $23.26, and the company's main competitors tumbled alongside it.



lost 3.6% to $5.30, while



slid 5.8% to $14.

Nokia, which had been considered a safe haven in the technology sector, said it expects the global mobile-phone market to show only

"very modest growth" this year. The Finnish cell-phone company also said weaker market conditions will hurt its financial performance during the second quarter.

"The market has been afraid of a parade of profit warnings," said Todd Clark, head of listed trading at

W.R. Hambrecht

. And it has been getting them in spades since

Sun Microsystems

(SUNW) - Get Report

started the second-quarter confession season about two weeks ago. "Nokia's warning that it doesn't see light at the end of the tunnel means that the possibility of discounting growth in the second half of the year needs to be thrown out the window."

The Nasdaq shed 2% Monday amid profit warnings from a wide swath of corporate America. Investors, who sent stocks up significantly in April based on hopes that the economy was recovering, are worried that a second-half turnaround is becoming increasingly unlikely.



(INTC) - Get Report

closed off by 0.7% to $30.13.

One of the weakest links on the

blue-chip index: manufacturing and technology conglomerate


(HON) - Get Report

, which slumped 3.9% to $43.47. Yesterday,

General Electric's

(GE) - Get Report

planned acquisition of Honeywell ran into obstacles with regulators in Europe. They have reportedly asked GE to sell more than half of Honeywell's aerospace division, the very business that makes it an appealing acquisition. GE closed up by 2.9% to $48.77.

But all news wasn't gloomy in the market.


(DELL) - Get Report


upgraded to outperform from neutral by

Morgan Stanley Dean Witter

. The PC maker rose 3.3% to $26.10.


raised the price range for its

IPO, which is scheduled for Wednesday. Tobacco giant

Philip Morris

(MO) - Get Report

will let go of a 16% stake in the food giant. If it comes in at the top end of the new range, the IPO will bring Philip Morris $9.03 billion, which will be used to pay down the company's debt. Philip Morris closed higher by 1.2% to $49.10.

Fasten Seatbelts

Still, the news driving trading today was overwhelmingly negative -- though the market had turned around the last 30 minutes of trading. Shares of software companies were trading lower after

Goldman Sachs


Rick Sherlund said

executives are very concerned about the European slowdown and worried that the second quarter that won't show improvement over the first.





(ORCL) - Get Report

both posted losses today: EMC lost 0.5% to $31.74, and Oracle slid 0.4% to $16.13.

And a round of profit warnings hit Wall Street last night.



, a genetic technology company, said it would

fall short of Wall Street estimates for the second quarter because of slower-than-expected sales. Its negative outlook put a

drag on the biotech sector. Affymetrix closed off by 36.5% to $26.01.


Hughes Electronics


, the company behind the


home satellite services, said it would

miss forecasts for subscriber growth in the second quarter and the rest of the year. Hughes was lately trading lower by 11.95% to $19.90.

So far, this quarter's confession season has been mostly negative. Wall Street awaits the

Federal Reserve's next policy meeting on June 26 and 27, when the central bank is expected to cut short-term interest rates by an additional quarter-point. But investors expect the Fed may be finished with its reductions after that meeting because it has cut the

fed funds rate, or the rate at which banks lend to one another, by 2.5 points since the beginning of the year.

Chip stocks, financials and cyclicals had been among the sectors getting hit hard today, but all closed up from their session lows. The

Philadelphia Stock Exchange Semiconductor Index

turned around and closed up by 0.1%. For a closer look at how key sectors are moving, check out


Markets Page.

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