NEW YORK >> The stock market lurched higher today, lifting the Dow Jones industrials by more than 340 points as investors' hunger for bargains prompted them to at least temporarily set aside concerns about economy. Bargain hunters mine
volatile marketBy Adam Geller
Associated PressBut analysts said the advance -- the Dow's biggest in two months and its seventh straight triple-digit move -- did not mean Wall Street had resumed an upward track. Analysts said there was no conviction behind the gain; it was merely a reaction to the market's recent sharp drop.
"It is just a very oversold market in the short term," said Arthur Hogan, chief market analyst at Jefferies & Co.
Analysts also cautioned that the market was highly vulnerable to the next batch of news that says the economy remains fragile.
"When we post a rally like this, no one wants to get in the way, because we have been selling stocks for three years. After one of these selloffs, everyone hopes and prays it is the bottom. So that is why we get these exaggerated moves," Hogan said. "But the fundamental macroecnomic problems are still going to be there when we wake up."
The Dow had its eighth-biggest one-day point gain ever, rising 346.86, or 4.6 percent, at 7,938.79. The gain offset much of the Dow's 406-point loss over the previous two sessions. It was also the Dow's biggest one-day point gain since July 29, when it rose 447.49.
Advancing issues outnumbered decliners by 9 to 5 on the New York Stock Exchange, where volume was heavy.
The broader market also soared. The Nasdaq composite index rose 41.65, or 3.6 percent, to 1,213.71. The Standard & Poor's 500 index advanced 32.63, or 4 percent, to 847.91. The Russell 2000 index rose 5.82, or 1.6 percent, to 368.09.
The price of the Treasury's 10-year note was down 1 3/32 point today, while its yield rose to 3.72 percent from 3.59 percent late yesterday. Two-year Treasury notes were down 7/32 point and yielded 1.80 percent, up from 1.69 percent yesterday.
Depressed prices after Wall Street's latest drop drew buyers even as the market digested a report by the Institute of Supply Management that manufacturing activity contracted in September after seven straight months of growth. The decline in the group's index of business activity to a reading of 49.5 is significant because any figure below 50 shows contraction.
Also today, the Commerce Department reported construction spending dropped 0.4 percent in August. The dropoff, chiefly because of cutbacks in private builders' projects including offices, industrial complexes and hotels, met analysts' expectations and followed a 0.1 percent decrease in July.
Some of today's buying could also be attributed to a practice called short covering in which investors who sold shares expecting the market to keep dropping are forced to buy stock to cover their positions when the market advances.
Gainers included Sun Microsystems, up 17 cents at $2.76. The company disclosed late yesterday that its earnings for the year would be higher than expected due to adjustments in its accounting.
Shares of Vivendi Universal and News Corp. advanced after a deal was announced for Vivendi to sell its Italian pay-TV business, Telepiu, to News Corp. Vivendi rose 86 cents to $12.25. News Corp. gained 88 cents to $20.13.
Overseas, markets were mixed with Japan's Nikkei stock average closing down 2.4 percent. In Europe, Germany's DAX index gained 3.5 percent, France's CAC-40 climbed 1.8 percent, and Britain's FTSE 100 rose 2 percent. Hong Kong markets were closed for the National Day holiday.