Publish date:

Today's Market: Nasdaq Posts Triple-Digit Gain on Tech's Comeback Day

The Dow ended little changed, but Intel, Merck and H-P all ended way higher.

Technology stocks tore away from the broader market in an effort to repair some of the damage of a three-day selloff. The

Nasdaq rocked into rally mode, ending the session up 139.08, or 3.7%, to 3865.60.

Meanwhile blue-chips stayed on the sidelines throughout the session as foreign currency concerns and rising raw material prices kept investors feeling cautious. By the end of the day, some of that tech enthusiasm proved contagious as the

Dow Jones Industrial Average brightened a bit. But after just a few minute in positive territory, the Dow slipped and ended the day down 19.23, or 0.2%, to 10,789.29.

The Dow's technology components fought the selling pressure in industrial stocks such as

Alcoa

(AA) - Get Report

and

United Technologies

.

The

S&P 500 was up 15.39 to 1459.90, while the

Russell 2000 was up 6.63 to 523.31.

Earlier in the day, when both the Dow and the Comp shot out of the gate, a number of market watchers suggested it might just be a dead-cat bounce. The Dow lived up to that expectation as it quickly lost steam, while the Comp kept a tight grip on the gains and kept going. But despite the positive action, some remain unconvinced.

"We've given up trying to guess the day-to-day moves," said John Bartlett, director of economic and market strategy at

Commerce Bank

in St. Louis. "Rotation is extremely severe. People sell on any news whether it's meaningful or not," he said, adding that his firm remains fairly confident in their holdings, which include a "modest and select overweighting in tech."

Intel

(INTC) - Get Report

set the tone for the chip sector, popping $4.56, or 8.2%, to $60.38 after

Bear Stearns

reiterated a buy rating and a price target of 90. The news gave the semiconductor sector a lift with the

Philadelphia Stock Exchange Semiconductor Index

, which has slipped 17.5% since the start of September, snapping back 8.1%.

Bartlett said the recent slide in the tech sector also provided a buying opportunity for certain issues. In the past few days, he said, his firm bought shares of

JDS Uniphase

(JDSU)

when it was at about 100.

Alcoa was the culprit for much of the Dow's downside, accounting for 15.5 points of pressure. Alcoa lost 5.1%, to $25.63 after the aluminum maker yesterday had a post-close announcement that its third-quarter earnings would miss analyst expectations due to higher energy costs.

The

Morgan Stanley Dean Witter Cyclical Index

fell 0.9%, to 454.73, after touching an intraday low of 450.32.

"The dollar, oil and pre-announcement season are your three big themes. By the time earnings season comes, what's left is mostly good news, so getting through pre-announcement season may cause a rally," says Brian Conroy, head of listed trading at

J.P. Morgan

. But, Conroy said, with the weak Euro and the rising price of oil causing some bad earnings, we wouldn't see a sustained rally until those conditions improve.

TheStreet.com

recently wrote about

soaring oil prices and

earnings warnings.

And with crude oil futures continuing to tip north of $35 per barrel, third-quarter earnings might not be the only period that gets clinched by the high price of oil. "I think the focus has shifted to the price of oil, and that's what's been giving the market some concern," said James Maguire, managing director at

LaBranche

. "I think maybe it's starting to look beyond the third-quarter earnings, with concern that the rising price of oil may put a damper on earnings going forward."

The

American Stock Exchange Oil & Gas Index

fell 2.7%, after hitting another all-time high yesterday.

Texaco

(TX) - Get Report

dropped 3%, to $53.56, while

British Petroleum

(BP) - Get Report

slipped 2.8%.

The

Philadelphia Stock Exchange Oil Service Index

also lost some ground, down 1.8%, with

Halliburton

(HAL) - Get Report

sliding 0.9%.

Financials bounced back, after

Goldman Sachs

(GS) - Get Report

posted better-than-expected, third-quarter earnings. The

American Stock Exchange Broker/Dealer Index

gained 2.6% to 660.07, after falling from its recent all-time high level of 708.76.

J.P. Morgan's

(JPM) - Get Report

recent decision to combine with

Chase

TheStreet Recommends

(CMB)

quelled merger speculation, which had sent the index soaring more than 15% in the past three weeks.

Back to top

Market Internals

Breadth was negative on moderate volume.

New York Stock Exchange: 1,380 advancers, 1,492 decliners, 1.021 billion shares. 54 new 52-week highs, 114 new lows.

Nasdaq Stock Market: 2,246 advancers, 1,716 decliners, 1.672 million shares. 63 new highs, 132 new lows.

Back to top

Most Active Stocks

NYSE Most Actives

  • Lucent (LU) : 16.8 million shares.
  • AT&T (T) - Get Report: 16.2 million shares.
  • Chase Manhattan Bank (CMB) : 13.9 million shares.

Nasdaq Most Actives

Back to top

Sector Watch

The

American Stock Exchange Oil & Gas Index

shed 2.7% after hitting another all-time high yesterday.

Texaco

(TX) - Get Report

fell 5.4%, while

British Petroleum

(BP) - Get Report

was off 2.8%.

The

Philadelphia Stock Exchange Oil Service Index

was also 1.8% lower, with

Halliburton

(HAL) - Get Report

off fractionally.

Telecom rose, with the

Nasdaq Telecom Index

rose 3.8%.

Biotech was also posting gains, with the

Nasdaq Biotech Index

moving up 2.4% higher.

Back to top

Bonds/Economy

The trend that took taken hold in the Treasury market in the last week -- long-term yields rising, while short-term yields hold steady -- was on hold for today.

In the last several trading sessions, long-term Treasuries have fallen in price so much that the 30-year bond's yield finds itself higher than the 10- and five-year note yields for the first time since January. The shift has been driven mainly by the belief the

Fed is unlikely to hike interest rates again this year.

But the shift was so sudden and violent that market participants are not surprised to see it pause for a day. After all, anyone who has simultaneously owned short-term Treasuries and been short long-term Treasuries over the last week was sitting on a fat profit, and could reasonably have been expected to close out those positions by selling the short-term issues and buying back the long-term ones.

The benchmark 10-year Treasury note rose 4/32 at 99 7/32, its yield 5.85%.

Back to top

International

European markets were narrowly mixed near break-even. Frankfurt stocks had turned just barely into the green .

The

FTSE 100

was down 6.7, to 6403.57.

Across the channel, the

CAC 40

in Paris was down 7.57 to 6529.95, and the

Xetra Dax

in Frankfurt rose 46.05 to 6937.74.

The

embattled euro traded at $0.8507.

Asian markets traded higher overnight.

A late-day rally in selected technology shares helped nudge key Japanese indices a hair higher today. But the buying continued to be countered by selling from institutional investors that shed blue-chips ahead of book closings for the fiscal first half.

The

Nikkei 225

index rose 63.03 to close at 16,124.19.

Hong Kong's

Hang Seng

index rose 117.04 to close at 15,677.20, reversing the ugly 4% drop recorded yesterday. A bout of short-covering in the futures market, along with property shares rallying helped sentiment today.

Cheung Kong

rose HK$2.50, or 2.7%, to 94.25 ($12.09), while

Sun Hung Kai Properties

climbed 2.25, or 3.5%, to 66.75.

Korea's

Kospi

index declined for the ninth straight session, closing down 6.39, or 1.1%, at 571.17. Investors are still fleeing the market on worries over slowing corporate restructuring. Taiwan's

TWSE

index also fell 175.24, or 2.5%, to end at 6734.90.