NEW YORK – Stocks bounced back today as a strong earnings report from JDS Uniphase helped restore investors’ confidence in tech stocks. A report showing a gentle slowdown in economic growth also calmed fears of inflation and interest rate hikes.
According to preliminary calculations, the Dow Jones industrial average rose 210.50 to 10,590.62.
Broader indicators were also higher. The Nasdaq composite index ended with a gain of 5.77, closing at 3,277.95 after waffling in and out of positive territory during the day. The Standard &Poor’s 500 index rose 15.16 to 1,379.60.
JDS Uniphase rose $2.813 to $77.25 after releasing better-than-expected earnings after the markets closed Thursday. Another fiber optic equipment maker, Corning, rose $6.063 to $76.063, and other major tech names also bounced back.
But Nortel, the telecom equipment maker whose poor earnings report touched off the rout in tech shares on Wednesday, continued to struggle. Nortel’s shares were off $2.375 at $43.
Throughout the third-quarter earnings season, investors have been dumping shares, especially those in the tech sector, at any news that results will be disappointing. But a growing belief that technology stocks are reaching a bottom turned the Nasdaq around in a late-afternoon rally Thursday.
Investors who have been long spooked by major selloffs and even crashes during the month of October could buy more of those shares next month, said Charles White, portfolio manager at Avatar Associates.
“Investors who look at history are longing for the end of the month,” he said. “We’re going to have to turn the page on the calendar and get the election behind us before we can mount anything serious.”
Earnings remained a factor in today’s trading. Amgen plunged $9.188 to $59.313 after reporting late Thursday that third-quarter net profit rose nearly 20 percent, but warned that sales of its two major drugs would fall short of previous estimates. The biotech company narrowly beat Wall Street’s earnings expectations.
The Dow got its boost today from the tech and telecommunications sectors. Microsoft rose $3.25 to $68.44. Telecommunications services provider SBC Communications was up $1.875 at $56.313.
Investors seemed relieved by news that the economy has slowed, which means for now the Federal Reserve is likely to leave interest rates unchanged. The government reportered earlier in the morning that the U.S. gross domestic product cooled in the third quarter to a 2.7 percent annual growth rate, slower than the 3.5 percent analysts were forecasting.
A surging economy has prompted the Federal Reserve Board to hike interest rates six times since 1999 to stave off inflation. The GDP is the nation’s total output of goods and services and the broadest measure of economic health.
Advancing issues outnumbered decliners by a 5-to-3 ratio on the New York Stock Exchange, where volume came to 1.08 billion shares, well below 1.28 billion shares the day before.
The Russell 2000 index was up 0.63 at 480.39.
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