Stocks rebound after
selloff early in week

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By Lisa Singhania
Associated Press

NEW YORK >> Wall Street rallied today, sending the Dow Jones industrials up more than 160 points in a stronger-than-expected rebound from the earnings driven selling that pummeled the market earlier this week.

Still, while the advance accelerated late in the session, analysts weren't impressed. They noted there is still no clear sign of when business and profits are going to turn around.

"It was a pretty healthy market today, but I don't think this rally is sustainable," said Bill Barker, investment strategy consultant at Dain Rauscher, who attributed much of the buying to hedge funds and computer program buying rather than a shift in attitude. "We still have a lot of earnings problems ahead that are going to keep a cap on this."

The Dow closed up 164.55 at 10,405.67, a gain of 1.6 percent, according to preliminary calculations, recovering nearly half the 335 points it had lost earlier this week.

Broader stock indicators also rebounded from significant losses. The Standard & Poor's 500 index rose 18.85, or 1.6 percent, to 1,190.50, while the Nasdaq composite index gained 25.18, or 1.3 percent, to 1,984.42.

Advancing issues led decliners 3 to 2 on the New York Stock Exchange, with 1,906 climbing, 1,179 falling and 234 unchanged. Volume came to 1.44 billion shares.

The Russell 2000 index gained 2.72 to 476.98. The NYSE composite index rose 8.20 to 606.32. The American Stock Exchange composite index lifted 7.41 to 882.45.

The price of the Treasury's 10-year note fell 16/32 to 98 22/32, while its yield rose 7 basis points to 5.175. The price of the 30-year note fell 29/32 to 96 28/32 and the yield rose 7 basis points to 5.592.

Overseas, Japan's Nikkei stock average rose nearly 0.1 percent. European markets were weak. Germany's DAX index slipped 1.4 percent, Britain's FT-SE 100 lost 0.8 percent, and France's CAC-40 dropped 1.7 percent.

All three indexes are above their lows for the year, but remain well below where they started 2001. The Dow is off more than 3 percent, the S&P down nearly 10 percent and the Nasdaq has fallen close to 20 percent.

A rebound had been expected today after the sharp decline of the past few sessions, since lower prices make some stocks look more attractive. But no one believed the advance was anything more than a temporary blip upward in response to the market's most recent drop.

Even the prospect of an August interest rate cut -- the seventh of the year -- has failed to excite Wall Street, which remains fixated on an earnings turnaround.

As a result, investors have been more inclined to sell, rather than buy.

Still, after three straight sessions of concentrated selling, investors today were in the mood to reward companies that delivered good earnings news. SBC Communications rose $2.58 to $43.38, a 6 percent gain, after beating Wall Street estimates. The stock is a Dow component and contributed significantly to the blue chips' rise.

Investors also bid Texaco higher, up $3.13 at $67.65, a 4.9 percent increase, after the company beat earnings expectations and said its merger with Chevron should be completed this fall.

Oil stocks were also helped by an OPEC decision to cut crude oil output by at least 1 million barrels a day.

Technology advanced, although most of its gains came late in the day. Oracle rose 6 percent, up $1.08 at $19.29.

"We're still seeing a lot of interest in buying technology from our clients, but it's much more measured," said Chris Wolfe, equity market strategist for J.P. Morgan Private Bank. "Much of the greed has been wiped out. People have been burned too much."

While the second quarter's dismal reports are mostly in, Wall Street has another series of challenges ahead. On Friday, the government will issue its first estimate of how the economy fared during the second quarter, as measured by the gross domestic product.

During August, the nation's retailers will release their earnings reports. And soon after that will be the start of the next warnings season -- when companies whose third-quarter results are going to fall short of expectations issue their bleak forecasts.

Investors who have seen the market beaten down for weeks might feel like it can't get much worse. Although the indexes are well above their lows for 2001, they are below where they started the year.

The market's recent hemorrhaging has come chiefly on the series of disappointing earnings reports.

There was also some bargain hunting of blue chips that had suffered in recent sessions. On the Dow,