Stocks Recover From Session Lows Hit on Rubin Resignation

The Nasdaq has even climbed into positive territory as the Internet sector continues to be strong.
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Wall Street continued trying to assimilate and analyze the surprising news of

Treasury

Secretary

Robert Rubin's

resignation, with major indices recovering from their initial downdraft as traders seize a sudden buying opportunity.

The announcement that the popular Rubin will leave, to be replaced by Deputy Secretary

Lawrence Summers

, sent the

Dow Jones Industrial Average

plunging instantly around 9:45 a.m. EDT. It lost as much as 213.34 to 10,812.81 but lately was down 56 to 10,970. The

S&P 500

was down 4 to 1352, off its low of 1332.95.

The

Nasdaq Composite Index

was up 10 to 2576, after falling to a session low of 2548.24.

Cisco

(CSCO) - Get Report

, which late

yesterday reported strong earnings and revenue, was almost entirely unscathed by the selling and was continuing to provide the Comp's best support. The networker was up 5 7/8 to 117 11/16.

TheStreet.com Internet Sector

index was up 3 to 657 and the small-cap

Russell 2000

was off fractionally at 446.

The benchmark 30-year Treasury bond was up 5/32 to 91 31/32, its yield edging down to 5.82%.

"He's thrown up enough trial balloons, we knew he'd do this at some point," said one market analyst. "Now that

Clinton

is out of danger and world economies have come back, he can go be with his family now. Remember the

New York Times

article about the 'team that saved the world'? The article goes out of its way to talk about how incredibly smart Lawrence Summers is according to everybody from

Fed

Chairman

Alan Greenspan

down. This has been set up since before the crisis."

The source, who requested anonymity, said he'd be buying on any Rubin-resignation-inspired downturn.

"I don't think it changes things a whole helluva lot," he said. "But Rubin is a smart guy and he's been extremely successful at using the system to his ends. It remains to be seen if Summers is as smart as everybody says he is. The world is in somewhat a stronger place than nine months ago, but we're not out of the woods yet. Let's see what happens."

Market internals were weak, especially on the

New York Stock Exchange

. NYSE decliners were leading advancers 1,575 to 912 on 215 million shares. On the

Nasdaq Composite Index

, 1,546 decliners were ahead of 1,489 advancers on 239 million shares. New 52-week highs were outpacing new lows 33 to 8 on the Big Board and 50 to 8 on the Nasdaq.

Rubin reportedly will leave his post in early July. The White House has confirmed the resignation; an official announcement is expected this afternoon.