Tech Paces Solid Session

Stocks close higher. The Nasdaq rises 0.6% thanks to strength in Apple Computer.
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Updated from 4:08 p.m. EDT

Tech stocks led the markets higher during another volatile session Wednesday, as traders looked ahead to the March employment report in two days and the beginning of first-quarter earnings season.

The

Nasdaq Composite

closed with a gain of 14.39 points, or 0.61%, to 2359.75. The

Dow Jones Industrial Average

rose 35.70 points, or 0.32%, to 11,239.55, and the

S&P 500

was up 5.63 points, or 0.43%, at 1311.56.

"We have earnings coming up and, without any bad warnings, we're expecting decent numbers," said Jay Suskind, head of institutional equity trading with Ryan Beck & Co. "We're grinding out the gains. However, we have the big employment number Friday and we may quiet down tomorrow ahead of that number."

Helping the Nasdaq was a 9.9% gain in

Apple Computer

(AAPL) - Get Report

, which released a software beta that enables its

Intel

(INTC) - Get Report

-based computers to run

Microsoft's

(MSFT) - Get Report

Windows XP operating system.

The employment report is expected to show that U.S. nonfarm payrolls rose by 190,000 last month, down from 243,000 in February.

Michael Sheldon, chief market strategist with Spencer Clarke, agrees that the market "may continue to be in a holding pattern until we get the jobs report Friday, which may provide the catalyst. Investors are looking for a number that will keep the

Federal Reserve

from becoming too aggressive, but they want one that shows the economy isn't struggling."

Suskind believes a number that meets expectations would help markets rally. "That moderation would give us a perfect situation, but anything outside of it could be trouble," he said.

The 10-year Treasury bond was up 5/32 in price to yield 4.84% after Treasury Secretary John Show said he expects the payrolls report to be "good." Elsewhere, the dollar fell against the yen and euro.

About 1.61 billion shares traded on the

New York Stock Exchange

, with advancers beating decliners by a 10-to-7 margin. Trading volume on the Nasdaq was 1.89 billion shares, and winners edged losers 8 to 7.

To view Gregg Greenberg's video take on today's market, click here

.

Oil and gas prices moved higher after a report from the Energy Department showed that U.S. crude inventories rose by 2.1 million barrels last week, while gas inventories fell by 4.4 million barrels. Both moves were larger than expected. Meanwhile, distillate stocks fell 2.6 million barrels.

Front-month crude finished the session up 84 cents to $67.07 a barrel, while gasoline rose 5 cents to $1.95 a gallon.

Metals finished trading mixed. Silver was down 2 cents to $11.71 an ounce, and gold futures added $2.20 to $592.80 an ounce.

"Gold prices may move above the $600 mark soon," said Sheldon. "There's a lot of debate about what a rise in commodity prices means, in terms of what they mean to the market. There's a tremendous amount of liquidity in the world, and gold is being used to diversify holdings."

Wednesday's economic calendar was light. The Institute for Supply Management's nonmanufacturing survey rose to a reading of 60.5 in March from 60.1 in February. Economists had expected a slight decline to 59.0 in March.

"There is little forward-looking information here," said Ian Shepherdson, chief economist with High Frequency Economics. "The average for the two months, 56.4, is consistent with nonmanufacturing payroll growth of about 225,000. Overall, looks good, but most of the survey tells us nothing about the future."

By sector, the Philadelphia Housing Sector index rose 2.9%, with 13 of its 20 components posting gains of 3% or more. The Philadelphia Semiconductor Sector index added 2.8%, with 11 of its 19 components rising 2.5% or more.

First-quarter earnings season is just around the corner, starting next week with numbers from

Alcoa

(AA) - Get Report

. Overall, analysts at Thomson First Call are looking for corporate profits to rise by roughly 10% from a year ago, up from the fourth quarter's 9.2% growth rate.

Two medical companies previewed quarters on Tuesday. Pharmaceuticals giant

Merck

(MRK) - Get Report

put pre-charge earnings at 71 cents to 75 cents for the period, well above the 64-cent Wall Street consensus, while

St. Jude

(STJ)

said it will struggle to match analysts' estimate of 39 cents a share in the quarter.

Merck was higher by 51 cents, or 1.4%, to close at $35.99. St. Jude tumbled 12.2%, losing $5.05 to $36.25.

Disk-drive maker

Maxtor

(MXO)

also fell after pegging first-quarter sales at $875 million to $885 million, below the $965 million consensus. Maxtor estimated its loss for the quarter at 39 cents or 40 cents a share, wider than feared. Maxtor lost 17 cents, or 1.7%, to $9.91.

Early Wednesday,

Autodesk

(ADSK) - Get Report

estimated its first-quarter operating profit at 30 cents to 32 cents a share on sales of $425 million to $435 million. Analysts were expecting 31 cents a share and $431 million. Autodesk added $1.45, or 3.8%, to $39.32.

Away from earnings, pilots at

Delta

(DALRQ)

voted to authorize a strike Tuesday if the airline scraps an existing contract. A job action at the bankrupt carrier could ground planes and, some analysts believe, lead to its demise. Delta was off 3 cents, or 5.5%, to close at 52 cents.

Another bankrupt company,

Calpine

(CPNLQ)

, set plans late Tuesday to sell 20 plants and cut 775 jobs. The power generator currently operates about 90 plants and employs 2,900 people. Calpine was unchanged at 26 cents.

Sears Holdings

(SHLD)

authorized the repurchase of up to $500 million in stock, as a previous $1 billion program neared completion. Sears gained $6.19, or 4.7%, to $137.87.

Great Atlantic & Pacific

(GAP)

lost ground after the company said it will pay a special dividend of $7.25 a share on April 25. A&P cited improved operating results and the proceeds from a recent asset sale. The stock fell 22 cents, or 0.6%, to $34.91.

Among ratings changes, Stifel Nicolaus upgraded rivals

Pepsi Bottling

(PBG)

and

Coca-Cola Enterprises

(CCE)

to buy from hold, assigning stock price targets of $35 and $24, respectively.

Pepsi Bottling tacked on 49 cents, or 1.6%, to $30.98. Coke Enterprise finished up 37 cents, or 1.8%, to $20.78.

Shares of

Tenet Healthcare

(THC) - Get Report

jumped 14.1% after Prudential upgraded the stock to overweight from neutral. The move comes a day after a second mistrial was declared in a bribery case against Tenet. The firm also assigned a stock price target of $10. Tenet closed up $1.11 to $9.01.

Chip stocks were facing pressure Wednesday after Credit Suisse downgraded

Fairchild Semiconductor

(FCS)

,

RF Micro Devices

(RFMD)

and

ON Semiconductor

(ONNN)

to underperform from neutral.

RF Micro Devices lost 30 cents, or 3.5%, to $8.40. ON Semiconductor managed to gain 14 cents, or 2%, to $7.31. Fairchild Semiconductor was unchanged at $19.20.

Overseas markets were mostly higher, with London's FTSE 100 rising 0.7% to 6044 and Germany's Xetra DAX tacking on 0.3% at 6030. In Asia, Japan's Nikkei lost 0.3% overnight to 17,244, while Hong Kong's market was closed.