The Iraqi parliament formally rejected the United Nations resolution on inspections, but concerns about war were trumped Tuesday by a smattering of good news from tech firms.
The early action suggests either that
Monday's selloff had little to do with Iraq, or that traders can't give up the tech ghost no matter how many times they're spooked by the sector. Or both.
As of 12:33 p.m. EST, the
Dow Jones Industrial Average
was up 1.6% to 8488.30, the
was higher by 1.6% to 889.96, and the
up 2.6% to 1354.01.
Trading volume was up significantly from Monday's quasi-holiday atmosphere, and market breadth had turned decidedly more positive. Of late, advancing stocks were leading decliners by roughly 2 to 1 in both
and Nasdaq activity.
As the day progress, technically inclined traders will be watching closely to see if the S&P 500 can sustain its rebound from Monday's close below the key 878 level, its July 23 closing level. The index recouping ground above resistance at 890 will also be a focus for short-term traders, as
contributor Jeff Cooper
Among the developments giving stock proxies a lift were strong earnings from European mobile giant
, the reiteration of fourth-quarter guidance by
, and some cautiously upbeat comments by executives at
Elsewhere, onetime momentum favorite
was up 19.4% on news that
will acquire its TV lens unit for $850 million, while
was higher by 5.7% after executives said the firm may use idle cash to repurchase stock or for a dividend.
Other positives included strong earnings and optimistic guidance from
and comments from
vice chairman Roger Ferguson, who said: "The pieces are in place to engender a gradual strengthening in economic activity in coming quarters."
Ferguson's comments dovetailed nicely with those of Cisco CEO John Chambers, who reportedly told attendees of a UBS Warburg telecom conference that 90% of CIOs Cisco has met with said they would increased their IT budgets if the economy improves.
Of course, there's the nagging issue of why anyone should give credence to what Fed officials say about the economy's fate. Over the summer, central bankers were uniformly optimistic about the recovery before grudgingly acknowledging harsher realities with last week's 50-basis-point rate cut. Similarly, Cisco's Chambers wasn't nearly as upbeat when the company reported quarterly earnings last week, and he has a history of wrongly forecasting recoveries and/or bottoms in tech spending.
But clearly, few traders were focusing on such concerns midday Tuesday as demand was ripe for the same names and groups that led the market's post-Oct. 9 advance. Of late, the Philadelphia Stock Exchange Semiconductor Index was up 5.9%, the Nasdaq Telecom Index was higher by 4.2%, and the Philadelphia Stock Exchange/KBW Bank Index was higher by 1.6%.
U.S. stocks were also getting a boost from some dismal economic data out of Germany and a equally downbeat assessment of the Eurozone economy by European Central Bank President Wim Duisenberg. Such developments aided demand for U.S. stocks and Treasury securities. The price of the benchmark 10-year note was lately up 8/32 to 101 19/32, its yield falling to 3.81%.
However, the notion that America may be the "only game in town" economically was doing little to aid the dollar. The Dollar Index was up a relatively modest 0.13 to 104.70, restrained by yield differentials between the greenback and other major currencies after the Fed's unexpectedly aggressive rate cut last week. (
contributor John Roque examined the potential implications of the dollar's recent fall
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Aaron L. Task writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to
Aaron L. Task.