Updated from 4:05 p.m. EDTThe Nasdaq rose to a fresh 13-month high Wednesday amid strength in chip and software stocks. But the broader market inched back after two days of gains. The Dow Jones Industrial Average finished down 29 points at 9293, while the Nasdaq rose almost 9 points to 1677. The S&P 500 fell a point to 1011. The Dow had been down as much as 91 points earlier, while the Nasdaq had been off 15 points and the S&P 500 had shed 6 points. Chip stocks notched particularly strong gains after Lehman Brothers upgraded a trio of company shares. But Eastman Kodak ( EK) was a big drag on the Dow, after the firm warned that second-quarter earnings from continuing operations would be 25 cents to 35 cents a share, down from previous forecasts of 60 cents to 80 cents a share. Shares tumbled $3.22 to $28.77. "We've got some backing-and-filling here on the Kodak news, but I don't see a major problem with this," said Jay Suskind, head of institutional equity trading at Ryan Beck & Co. While that news was surprising, Suskind said he isn't overly concerned about the preannouncement season in general. After all, Kodak blamed the SARS outbreak for its shortfall, which many people consider a one-time event, he said. Suskind also said that portfolio managers could deploy some more capital to the market over the next couple of weeks as the second quarter draws to a close. Kodak wasn't the only firm to disappoint investors, however. New York Times Co. ( NYT) and Clorox ( CLX) both declined after warning about second-quarter profit, and Morgan Stanley ( MWD) shed almost 6% to $46.89 after reporting a big drop in second-quarter earnings. Recent sentiment data also weighed on the broader market. Chartcraft.com's Investors Intelligence report showed that the percentage of bulls increased to 60.2% from 58.7 over the last week, while bearish sentiment declined to 16.1% from 16.3%. Bob Basel, head of stock trading at Smith Barney, said the market acted well in the face of bad news. "This market doesn't want to be held down, and there's enough cash on the sidelines that any time there's a pullback, buyers show up," he said. Chip stocks gained about 2% on average after Lehman Brothers upgraded shares of Applied Micro Circuits ( AMCC), PMC-Sierra ( PMCS), and Vitesse Semiconductor ( VTSS) to equal weight from underweight. Vitesse soared almost 11% to $5.62, while PMCS gained 7% to $13.33. Applied Micro rose 1% to $6.27. After the close Tuesday, the semiconductor capital-equipment book-to-bill ratio for May came in at 0.89, slightly below a revised ratio for April, of 0.90. The worldwide bookings figure of $751 million is 1% below April's revised $757 million. Software issues also rose after Oracle ( ORCL) said it wouldn't abandon its quest to buy PeopleSoft ( PSFT) without a fight. Oracle raised its offer for PeopleSoft to $19.50 a share from the original bid of $16, which would now give the hostile takeover attempt a value of $6.3 billion. Oracle's first offer came just days after PeopleSoft and J.D. Edwards ( JDEC) signed a merger agreement. Both of those companies have said they aren't interested and have sued to stop the takeover attempt. Oracle is firing back on the legal front, saying it will sue both PeopleSoft and J.D. Edwards. Oracle rose 0.07%, or a penny, to $13.42, while PeopleSoft rose 4%, or 74 cents, to $17.93. J.D. Edwards slipped 1%, or 14 cents, to $14.10. Elsewhere in the litigation realm, Microsoft ( MSFT) is filing 15 lawsuits in the U.S. and U.K. against senders of unsolicited email in a bid to stem the tide of spam sent to users of its email accounts. Microsoft fell 0.08%, or 2 cents, to $26.07. EDS ( EDS) rose 7.6% to $24.20 even though the company said it would take a large restructuring charge of between $425 million and $475 million this year. Bear Stearns ( BSC) fell 3% to $80.01 despite reporting a second-quarter profit that beat analysts' expectations.