Updated from 4:16 p.m. EDT
Stocks in the U.S. overcame a sluggish open Tuesday and went into rally mode, closing higher amid an advance in the technology sector.
Dow Jones Industrial Average
finished with a gain of 91.12 points, or 0.68%, at 13,448.86. The
added 15.43 points, or 1.05%, at 1489.42. The tech-heavy
surged 33.88 points, or 1.3%, to 2630.24, its fourth straight winning session.
"People came back from vacation with money and it's burning a hole in their pocket," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "Tech is major beneficiary of today's move as it has the least amount of credit concern attached to it. Everyone is enamored with tech stocks again and wants to get into the sector."
Among tech shares,
jumped 5.5% after Bear Stearns named the Internet portal one of its top picks.
rose 4.1% a day before it is expected to unveil an update to its iPod line of products.
was a bright spot on the Dow. The automaker posted an unexpected 6.1% rise in auto sales last month, and its shares rallied 3.8% to close at $31.92.
said that sales fell 14.4% last month. Chrysler, now only 20%-owned by
, reported a 6% decline in sales.
Several reports on the economy were also in the spotlight. The Institute for Supply Management said its manufacturing index slipped slightly last month to 52.9 from 53.8 in July, essentially in line with estimates.
"History shows that the ISM tends not to react rapidly to market events," said Ian Shepherdson, chief economist with High Frequency Economics. "The next few months will be key, though, as it will reveal how companies are responding to tighter credit conditions."
Separately, the Commerce Department said that construction spending eased a greater-than-anticipated 0.4% in July, following a 0.3% decline in June. Economists had predicted a 0.1% decline.
U.S. Treasuries were little changed on the day. The 10-year note was flat in price, yielding 4.56%. The 30-year bond rose 4/32 in price, reducing the yield to 4.84%.
"We still expect volatility, but with a little more bullish confidence, now that the Fed is firmly behind us," said Marc Pado, U.S. market strategist with Cantor Fitzgerald. "Bernanke may not have come out
Friday and said he was going to cut the fed funds rate, but investors came away feeling that 25 basis points was a lock at the Sept. 18 FOMC meeting and that the door was open for something bigger."
Volume was sluggish again to begin the new week. On the
New York Stock Exchange
2.44 billion shares changed hands as advancers topped decliners by an 8-to-3 margin. Volume on the Nasdaq reached 1.80 billion shares, with winners outpacing losers nearly 2 to 1.
Little was due in the way of earnings to start the shortened week, but reports from
are expected later this week.
As for ratings changes, Bear Stearns downgraded
Research In Motion
to peer perform from outperform. RIM dipped 7 cents, or 0.1%, to $85.34.
slid after the home repair retailer detailed results of its share tender offer, saying it would spend $10.7 billion to buy back stock. Shares lost $1.95, or 5.1%, to close at $36.36.
Elsewhere, oil prices jumped $1.04 to finish the session at $75.08 a barrel.
Overseas markets were mixed. Japan's Nikkei 225 slid 0.6% and Hong Kong's Hang Seng was off 0.1% overnight. In Europe, markets reversed early losses. London's FTSE 100 and Germany's Xetra Dax both rose 1%.