Freak out, collapse, rebound, repeat.

We're back in the rebound mode for now, as the major indices post significant gains on the back of yesterday's strong post-close earnings releases from

Microsoft

(MSFT) - Get Report

and

Nokia

(NOK) - Get Report

.

The earnings calendar has been a plague on everyone's houses for the last six weeks, but a number of companies have stemmed the tide, for now. These good results have people remembering the days of numerous positive surprises from companies and endless-seeming growth. OK, the market's not quite back there yet, but the pessimism has, for now, been diminished.

Were it to close now, the

Nasdaq Composite Index would boast one of the top 10 point gains in Nasdaq history. It's being led by a surge in Microsoft, which has rocketed past the $60 level and was lately trading at $60.25, up 16.7%. The software and applications titan reported

strong earnings last night after the close and had its earnings-per-share estimates upped by

Goldman Sachs

and

Merrill Lynch

. The company was the Dow favorite today, contributing 51 points of upside on the index.

Telecoms weren't doing so well yesterday, but thanks to

Nokia, other telecommunications names, like

Motorola

(MOT)

and

WorldCom

(WCOM)

, were gaining strongly. Nokia lately rose 28.8% to $38.63, while the

Nasdaq Telecommunications Index

jumped 6.9%.

Meanwhile,

Sun Microsystems

(SUNW) - Get Report

was up about 6% with a boost from an

ABN Amro

upgrade that lifted its rating to buy from outperform, and a

Bear Stearns

upward revision of EPS estimates for 2000 and 2001.

Sector Watch

It's a much-improved day for most sectors, including financials, which were treated worse than Spiro Agnew yesterday. The lately hurting

J.P. Morgan

TST Recommends

(JPM) - Get Report

was adding 44 points to the Dow. Yesterday, the stock suffered after its merger mate

Chase Manhattan

(CMB)

posted disappointing earnings. The Amex Broker/Dealer Index gained 4.7%, and the

Philadelphia Stock Exchange/KBW Bank Index

rose 3.9%.

The semiconductors were rebounding nicely following Nokia's news, as Nokia's robustness bodes well for chip demand, something analysts have been concerned about for months. The

Philadelphia Stock Exchange Semiconductor Index

was lately up 12.8%.

Even Internet stocks were getting into the act. TheStreet.com Internet Sector index rose 6.4%, led by gains in

eBay

(EBAY) - Get Report

(up 6.3%) and

Yahoo!

(YHOO)

, up 7%.

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Bonds/Economy

Following yesterday's erratic trading, the bond market was rallying today. The bond market has been taking its tone from the equity market, as investors, sensing fear in stocks, move to the relative safety of bonds; greater confidence in riskier assets like stocks tends to push people away from bonds.

However, the market has reacted favorably to today's economic data and a speech by

Fed Chairman

Alan Greenspan, who took a constructive tone in his speech about the

new economy.

The benchmark 10-year

Treasury note was lately trading at 100 23/32, up 9/32, to yield 5.655%. The 30-year

Treasury bond was up 12/32, trading at 106 9/32 and yielding 5.735%.

Greenspan spoke on "Challenges for Monetary Policymakers," at the

Cato Institute

. The text suggests that the speech has no clear implications for near-term monetary policy, but it was an upbeat address. Greenspan supports the view that the economy is experiencing a "sustained pickup in productivity growth" that should enable it to grow at a faster rate without generating inflation.

The

Philadelphia Fed Index

(

definition |

chart |

source

) for October fell to -3.8 after a rise of 8.2 in September. The index was much weaker than expected and clearly suggests slowing economic performance.

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