Tech sector upswing ends Wall Street’s losing streak

Associated Press

NEW YORK — Wall Street had its first winning session in more than a week Wednesday, after mildly encouraging news from Oracle launched a last-minute technology rally. The Dow Jones industrials surged more than 100 points.

The bulk of the gains came late in the day, with the tech sector advancing solidly on news reports that Oracle did not plan to issue an earnings warning for its fourth quarter. Analysts said the response reflected Wall Street’s hunger for something to rally on and did not signal any improvement in market conditions.

"The market has been very oversold, and people have been very pessimistic, and we were due for a rally," said Stephen Massocca, president of Pacific Growth Equities. "People had been betting Oracle would warn. When it didn’t, it became an excuse for people to buy."

The Dow closed up 108.96, or 1.1 percent, at 9,796.80, regaining nearly half of the 237 points it lost on Monday and Tuesday.

Broader stock measures also rose, particularly the Nasdaq composite index, which soared 17.14, or 1.1 percent, to 1,595.26. The Standard &Poor’s 500 index rose 9.21, or 0.9 percent, to 1,049.90.

It was the first session all three indicators closed higher since May 23, and followed what has been a difficult period for the markets. On Monday, the Dow fell to levels last seen in early February, while the Nasdaq recorded its lowest close since Oct. 2.

The day started on a quieter note. Wal-Mart reported stronger-than-expected May sales and Avon reaffirmed its forecast, but the news failed to spark a broad rally. Although blue chips trended higher for much of the session, technology didn’t catch up until the Oracle announcement.

In trading Wednesday, Wal-Mart rose 96 cents to $54.96, while Avon surged $2.69, or 5.2 percent, to $54.64.

Although many analysts expect that May retail sales, many of which are due out today, will be disappointing overall, the buying still spread to other retailers. The Gap rose 63 cents to $15.18 after Prudential Securities upgraded the stock.

Financial issues also advanced. American Express gained 92 cents to $41.01.

Technology stocks got a boost from Oracle, which gained 84 cents, or 10.7 percent, to $8.66.

Microsoft rose $1.68 to $51.66. And Intel jumped 68 cents to $28.18, despite spending much of the session at a loss. Intel is scheduled to release a midquarter update today. The stock is considered an indicator of where the broader tech sector is headed, and Oracle’s announcement might have allayed investors’ fears that Intel’s news would be terrible.

Philip Morris dropped 36 cents to $57.36 after the Oregon Court of Appeals reinstated a $79.5 million punitive damage award against the tobacco maker in a lawsuit that alleged the company knew of the harm of smoking and concealed the facts.

Although Oracle’s results are expected to be generally unimpressive, the market was still pleased with the software maker’s announcement. That’s because few companies have felt confident enough to even forecast solid business ahead. Earnings reports due out next month could alleviate or intensify Wall Street’s concerns about the pace of a recovery.

Investors are also uneasy because of the number of companies, including Microsoft and Halliburton, that have faced questions about or made changes to their accounting practices because of government scrutiny.

And the political crises overseas, whether in the Middle East or in India and Pakistan, have provided yet another reason to avoid stocks.

"The buying you’re seeing today is more of a rebound than a change in the big picture," said Robert Streed, portfolio manager of Northern Select Equity Fund. "The terrorism, accounting and other problems that have troubled the market for weeks now are still there."