The Dow Jones industrial average finished the day 18.12 points higher at 5,376.88. And the technology-laden Nasdaq market, which has fallen sharply since peaking at 1,249 on June 5, saw its composite index rise 31.56, or 3 percent, to close at 1,085.03.
Today, the Dow sprang up more than 70 points in the first 15 minutes of trading but then settled back to moderately higher levels for the rest of the session. That was a huge relief to investors who saw the blue-chip index dive 167 points yesterday, and soar to up more than 50 points before settling up 9.25. That was on top of a 161-point drop Monday.
Broad market indexes also finished stronger today, helped by a comeback in technology stocks that had led the market lower earlier this week.
Technology stocks were also helped by Intel Corp., which rose sharply in leading volume in Nasdaq trading. After the close of trading yesterday, the computer chip maker announced second-quarter net earnings of $1.17 per share, up from 99 cents a share a year ago and far above analysts' estimated $1.09 per share.
Software maker Computer Associates International Inc. also led technology stocks higher after it reported a surprisingly strong 35 percent climb in profits in the first fiscal quarter.
Since dour earnings reports had dragged the market down earlier this week, they lifted it today.
"Yes, Virginia, there are positive earnings surprises," said Larry Wachtel, a market analyst at Prudential Securities.
Advancers led decliners by more than 2 to 1 on the New York Stock Exchange, with 1,780 up, 739 down and 666 unchanged today.
Volume was heavy but below yesterday's blow-out session. NYSE volume totaled 509.47 million shares, vs. 680.33 million, which was the heaviest volume ever on the NYSE.
The NYSE's index rose 3.31 to 340.10; the Standard & Poor's 500-stock index climbed 5.71 to 634.08; and the American Stock Exchange index rose 14.39 to 539.99.
Investors were also encouraged by a report that June housing starts rose 1.3 percent, more than expected, despite higher mortgage rates. But applications for building permits, a gauge of future activity, slipped 2.5 percent.
The housing report signaled to investors that the economy is growing at a moderate but not inflationary pace, and that the Federal Reserve may not tighten interest rates in the short term to cap inflation.