NEW YORK - The Nasdaq composite index, the U.S. stock market's biggest basket of Internet and computer shares, had its biggest rally this month on optimism that the past week's 10 percent drop was too steep given the industry's growth outlook.
Dow up 8;Bloomberg News
The Nasdaq rose 64.03, or 2.7 percent, to 2,409.71, its best showing since March 29.
The Dow Jones industrial average eked out an 8.02-point gain to 10,448.55, and the Standard & Poor's 500 Index rose 16.69, or 1.3 percent, to 1,306.17. Drug stocks led gainers after Johnson & Johnson reported better-than-expected profit.
Declining issues outnumbered advancers by a 6-to-5 margin on the New York Stock Exchange, with 1,369 up, 1,672 down and 497 unchanged. NYSE volume totaled 984.06 million shares vs. 1.218 billion yesterday.
The NYSE composite index rose 4.96 to 620.84, and the American Stock Exchange composite index gained 1.87 to 736.98. The Russell 2000 index rose 2.93 to 415.34.
The 30-year U.S. Treasury bond rose 2/32, or 63 cents per $1,000 security, to 96 5/32, pushing its yield down to 5.51 percent from 5.52 yesterday.
Microsoft Corp., which reported better-than-expected earnings after the market closed, led the Nasdaq higher after losing 6 percent yesterday. Internet shares such as Inktomi Corp. soared.
After yesterday's drop, "people said, 'Whoa, maybe that's enough; maybe there are some bargains,' " said Eric Efron, co-manager of the $840 million USAA Aggressive Growth Fund.