NEW YORK >> Bargain hunters surfaced on Wall Street today, sending stocks sharply higher after two days of steep declines left blue chips and tech shares at four- and six-year lows. Investors scoop up bargains
By Hope Yen
Associated Press"The markets coming in today were considered somewhat oversold, so you had a reflex rally," said Steven Goldman, chief market strategist at Weeden & Co. in Greenwich, Conn. "A lot of companies are now stating they were affirming forecasts and that led to a little reprieve."
Advancing issues outnumbered decliners 9 to 4 on the New York Stock Exchange. Volume was moderate. The Dow Jones industrial average rose 158.69, or 2.1 percent, to close at 7,841.82. The gain erased most of an 189-point drop yesterday that sent blue chips to a four-year low.
The broader market also finished sharply higher. The Nasdaq composite index climbed 40.12, or 3.4 percent, to 1,222.29, having declined 3 points in the previous session to a six-year low. The Standard & Poor's 500 index gained 20.37, or 2.5 percent, to 839.66. The Russell 2000 index, which tracks smaller company stocks, rose 8.56, or 2.4 percent, to 365.14.
The price of the Treasury's 10-year note was down 29/32 point today, while its yield rose to 3.75 percent from 3.64 percent late yesterday. Two-year Treasury notes were down 1/8 point and yielded 1.94 percent, up from 1.88 percent yesterday.
General Electric rose $1.28 to $27 after the company said it would affirm its third-quarter earnings estimate at an analysts' meeting tomorrow. Ford climbed 63 cents to $9.97 after the automaker said it will increase fourth-quarter production due to strong sales.
Investors largely shrugged off a National Association of Realtors report showing sales of previously owned homes dipped 1.7 percent in August. The results surprised analysts, who had expected sales to increase.
Even with the decline, the association's chief economist said the level of sales was still brisk and existing-home sales are on track for a record this year.
"It is still a very healthy pace but certainly we are winding down from the boom," David Lereah said.
Even as the economic recovery has faltered, home sales have been robust this year, powered by low mortgage rates.
Although the drop in August surprised analysts, economists said the brisk housing activity could not be maintained. Existing-home sales rose by 5.3 percent in July.
Analysts discounted today's stock rally as likely to be short-lived. They say investors have grown increasingly pessimistic about the strength of the economy in the past month due to mixed economic reports, earnings warnings and concerns about a war with Iraq.
Since hitting a peak on Aug. 22, the Dow has lost about 1,200 points. It has not seen a triple-digit closing gain since Sept. 6, when blue chips rose 143.50 points.
"We're in such a tough market sentiment period of time where negative news is really the only thing that sticks to the wall," said Tim Leach, chief investment officer for Wells Fargo's Private Client Services. "We're not out of the woods."
Tyco International rose $1.65 to $15 despite cutting its fourth-quarter earnings guidance, citing higher-than-expected taxes and slow operations.
Decliners included Philip Morris, which fell $1.23 to $41.48, after Morgan Stanley cut the tobacco industry's near-term outlook, citing expectations for increased promotional spending.
Overseas, Japan's Nikkei stock average finished lower 1.7 percent. In Europe, France's CAC-40 climbed 1.6 percent, Britain's FTSE 100 rose 0.7 percent, and Germany's DAX index was up 3.1 percent.