Updated from 4:20 p.m. EDT
Stocks surged Wednesday as tech buyers cheered a strong earnings report from
and investors shook off some jitters about the credit markets.
jumped 51.38 points, or 2.01%, to 2612.98, bolstered by Cisco's earnings beat and strong outlook.
The other major averages rebounded from a late bout of volatility and ended solidly higher. The
Dow Jones Industrial Average
, which briefly plunged into negative negative territory in the last hour of trading, rose 153.56 points, or 1.14%, to 13,657.86. The
added 20.78 points, or 1.41%, to 1497.49.
For the market, it represented the third straight day of gains after a massive selloff last week.
After the prior session's closing bell, Cisco posted profit and revenue figures that beat the Thomson First Call mean estimates. The networking-gear maker also raised its revenue guidance for the first quarter.
Bear Stearns upgraded Cisco to outperform from peer perform after the report, and the stock surged $1.99, or 6.7%, to close at $31.68.
"Cisco's news really gave us positive momentum," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "Even with the late day jitters from rumors, which gave us a lot of volatility, there is still money on the sidelines and there are some opportunities. No one wants to be left behind."
Roughly 5.35 billion shares traded on the
New York Stock Exchange
, with advancers topping decliners by a 12-to-5 margin. About 3.54 billion shares changed hands on the Nasdaq, as winners outpaced losers 2 to 1.
The embattled financial sector, the biggest part of the S&P 500, also was in recovery mode Wednesday, despite a late-session hiccup in shares of
The Nasdaq Financial 100 Index added 2.6%, the NYSE Financial Sector Index was up 2.2%, and the KBW Bank Index was higher by 1.8%.
The financial stocks' gains came as investors worried about the credit markets were somewhat soothed by the
statement Tuesday, which acknowledged recent credit market tightness but maintained that inflation remains the biggest threat to the economy.
The Dow fluctuated after the statement, but ultimately the index ended Tuesday's session higher by 35.32 points, or 0.26%, to 13,504.30. The S&P 500 rose 9.04 points, or 0.62%, to 1476.71, while the
climbed 14.27 points, or 0.56%, to 2561.60.
"Post-Fed, the market seems to be a lot calmer," said Peter Cardillo, chief market economist with Avalon Partners. "Yesterday's announcement was what the market really needed to hear. Things are being monitored, but they're not bad."
beat estimates and offered guidance that was ahead of expectations. Sprint started higher but pulled back, ending lower by 45 cents, or 2.2%, to $19.77.
traded sharply lower after missing fiscal first-quarter earnings targets. The apparel company also cut its full-year guidance for 2008. The stock was losing $10.98, or 11.8%, at $81.80.
said its fiscal third-quarter revenue fell 21%, and the company said home sales could continue to slide until the credit mess is cleaned up.
Still, Toll Brothers finished higher by $1.38, or 6%, at $24.33, because the revenue decline wasn't as bad as analysts expected. The gain helped lift the Philadelphia Housing Sector Index, which rose 4.3%.
Railroad stocks were boosted by word that Warren Buffet's investment vehicle
purchased another 1.62 million shares of
Burlington Northern Santa Fe
BNSF and rival
closed up 1.7% and 2.6%, respectively.
shares soared 9.8% on news that handset maker
will be using the company's cell-phone chips.
Away from stocks, oil prices fell despite the Energy Department's latest inventory report showed a bigger-than-expected drop in supply. The front-month September crude contract, which has fallen 4% so far this week, shed another 27 cents to $72.15.
The Energy Department said that gasoline stocks unexpectedly fell by 1.7 million barrels last week. Crude stocks, meanwhile, fell by a greater-than-expected 4.1 million barrels, and distillates rose 1 million barrels.
Investors were also absorbing more economic data. Shortly after the opening bell, the Commerce Department said wholesale inventories rose 0.6% in June. Economists expect a 0.4% rise, compared with 0.5% in May.
Treasury prices tumbled and finished lower. The 10-year note fell 22/32 in price, yielding 4.86%, and the 30-year bond lost 1 12/32, yielding 5.02%.
Overseas markets were rallying after the Reserve Bank of Australia raised rates by a quarter-point to 6.5%, adding that recent credit market problems do not seem to have overflowed into the broader global outlook.
London's FTSE was 1.4% higher, and Frankfurt's DAX was up 1.2%. Overnight in Asia, Tokyo's Nikkei gained 0.6%, and Hong Kong's Hang Seng jumped 2.9%.