Updated from 4:05 p.m. ESTTech stocks rallied Wednesday, and the Dow Jones Industrial Average reclaimed 11,000 as Google's ( GOOG) first foray into spin control bore fruit. The Nasdaq Composite surged by 33.25 points, or 1.46%, to 2314.64, thanks to a 4.3% rise in the Philadelphia Stock Exchange Semiconductor Sector index. All 19 components finished with gains of 1% or greater. The Dow rose 60.12 points, or 0.55%, to 11,053.53, having closed below 11,000 Tuesday for the first time since Feb. 13. The S&P 500 was up 10.58 points, or 0.83%, at 1291.24. "Today was almost the opposite of yesterday," when each of the major averages fell by about 1%, said Art Hogan, chief market analyst with Jefferies. "Yesterday we had cloudy news from Google, and today they act more like a company and give us more of an explanation. Today's economic data has been positive compared to the negative tone set yesterday by all of the economic releases." About 1.63 billion shares traded on the New York Stock Exchange, and volume on the Nasdaq was 2.21 billion shares. Advancers outpaced decliners roughly 2 to 1. The 10-year Treasury was down 10/32 in price to yield 4.59% -- 11 basis points below the two-year note -- while the dollar rose against the yen and euro. Google, which sparked the previous session's pain with dour comments about its growth outlook, took the unusual step of issuing a public statement clarifying the remarks after the bell Tuesday. Google focused especially on the market for paid-search, or "monetization," which its CFO said could be nearing saturation. "As we have stated before, monetization improvements will continue to be a key factor in driving future revenue growth," Google said. "We still see significant opportunities to improve monetization and intend to continue to focus our efforts in this area. "Moreover, as we have stated in our SEC filings, our revenue growth rate has generally declined over time, and we expect that it will continue to do so as a result of the difficulty of maintaining growth rates on a percentage basis as our revenues increase to higher levels," Google said. Shares gained $2.18, or 0.6%, to end the session at $364.80. To view Gregg Greenberg's video take on today's market,
Elsewhere, J.P. Morgan made a bearish call on Intel ( INTC). The firm lowered its 2006 profit estimate on Intel to $1.03 a share and said "additional potential downside exists." The Thomson First Call consensus is for $1.23 a share. J.P. Morgan said channel checks point to a first-quarter sales miss. Still, Intel tacked on 20 cents, or 1%, to $20.80. Another Dow component, Pfizer ( PFE), closed higher despite a New Zealand research study, which relied on a compilation of past data that purportedly showed the company's arthritis drug Celebrex increases the risk of heart attacks. Pfizer was up 7 cents, or 0.3%, to finish at $26.26. Oil firmed after an Energy Department inventory update that showed builds in crude and gasoline stocks but a decline in distillates. The April contract finished up 56 cents to close at $61.97 a barrel in Nymex floor trading. Crude inventories rose by 1.6 million barrels and gas stocks increased by 300,000 barrels last week, mostly in line with expectations. Distillate inventories fell by 1.5 million barrels. The Commerce Department said personal income rose 0.7% in January while spending increased 0.9%. The core inflation number, which excludes food and energy, advanced 0.2%. For the last 12 months, core inflation is up 1.8%, a two-year low. "The first batch of economic numbers for the day matched expectations," said Peter Cardillo, chief market analyst with S.W. Bach. "Core inflation isn't yet a real problem. After yesterday's overexaggerated decline, these numbers still show economic growth and may help give us a rebound." In addition, the Institute for Supply Management said its manufacturing index rose to 56.7 from 54.8 in January, better than expectations. Meanwhile, the Commerce Department said construction spending for January rose 0.2%, below estimates.
Monthly automobile sales figures were released Wednesday, with DaimlerChrysler ( DCX) reporting a 4% rise in U.S. sales in February thanks to a 28% increase in sales of Mercedes-Benz. Ford ( F) reported a 4% drop in U.S. sales for the month while General Motors ( GM) posted a 2.5% loss. GM also was pressured by a downgrade from Fitch Ratings to B from B+. Fitch is keeping GM on rating watch negative, saying the automaker's lack of cost-cutting will result in negative cash flows. The stock fell 40 cents, or 2%, to close at $19.91. In earnings news, Autodesk ( ADSK) rose after posting better-than-expected fourth-quarter earnings and raising guidance. The software company's fourth-quarter earnings rose 26% from a year ago to $83 million, or 33 cents a share, while adjusted earnings of 37 cents a share were 2 cents above forecasts. Shares surged $4.03, or 10.7%, to $41.68. Poultry farmer Pilgrim's Pride ( PPC) withdrew previously issued guidance for the second quarter and full year, citing weak international demand for chicken-leg quarters. The company said it will update its outlook during a May 2 conference call. Pilgrim's Pride added 21 cents, or 0.9%, to $23.27. Automotive parts retailer AutoZone ( AZO) posted fiscal second-quarter earnings of $97 million, or $1.25 a share, up from $94.1 million, or $1.16 a share, a year ago. Excluding items, earnings would have been $1.29 a share, beating the Thomson First Call consensus by a penny. Shares of AutoZone rose $3.58, or 3.7%, to $100.26. Liz Claiborne ( LIZ) said fourth-quarter profit fell to $78 million, or 74 cents a share, from $83 million, or 75 cents a share, a year earlier. Results included a 4-cent-a-share charge related to a change in accounting rules. Analysts, on average, expected EPS of 72 cents, according to Thomson First Call. Liz Claiborne was higher by $1.10, or 3.1%, to close at $37.13. Pacific Sunwear ( PSUN) said fourth-quarter earnings rose 15% from last year to $47 million, or 63 cents a share, matching estimates on a 12% sales rise. But the shares ran into trouble when the company reported an unexpected decline in February same-store sales and issued profit guidance that trailed estimates. Pacific Sunwear dropped $1.88, or 7.9%, to $21.93. The losses in the U.S. markets Tuesday put pressure on many exchanges overseas. While London's FTSE 100 was up 0.5% to 5818, Germany's Xetra DAX was losing 2% to 5796. In Asia, Japan's Nikkei fell 1.5% overnight to 15,964, and Hong Kong's Hang Seng lost 0.7% to 15,818.