By AMY BALDWIN
NEW YORK — The growing belief that technology stocks are reaching a bottom turned the battered Nasdaq composite index around in a late-afternoon rally today, but the overall market ended a volatile session mixed.
The tech-focused Nasdaq, down more than 140 points in early afternoon, closed up 42.61 at 3,272.18 after losing 190 points on Wednesday.
The Dow Jones industrial average closed up 53.64 at 10,380.12, but retreated from larger gains earlier in the day. The broader Standard & Poor’s 500 index fell 0.46 to 1,364.44.
Investors seemed to be searching for a trend after Wednesday’s session, when a disappointing revenue report from telecommunications equipment maker Nortel Networks touched off a decline in the fiber optics and telecom sectors and brought the overall market lower. Today’s turnaround appeared to be linked to Nortel and other tech stocks.
Nortel traded erratically today following a 29 percent plunge in the previous session. But it closed up 75 cents at $45.75.
"The market is so quick these days to try to anticipate trend changes," said Chris Dickerson, analyst with Global Market Strategists in Gainesville, Ga.
In the last hour of trading, investors began feeling better about tech stocks, Dickerson said. So, they pulled money from the Dow to buy depressed tech shares, including JDS Uniphase, which reported better-than-expected earnings after the markets closed.
"I think there is a memory that last week’s rally was spurred by surprising earnings by Microsoft. And I think there was a feeling that JDS Uniphase would surprise," Dickerson said.
JDS Uniphase rose $3.44 to $74.44 in regular trading, recovering from earlier losses. The company released its first-quarter earnings after the close, and beat analyst expectations by 2 cents a share, and its stock rose 81 cents in after-hours trading.
Analysts said investors should expect prices to fluctuate given the current market environment, where any signs of bad earnings news send stocks tumbling. A permanent market recovery or even a consistent rally will take a while.
"The market is feeling for a bottom," said Eugene Mintz, financial markets analyst at Brown Brothers Harriman & Co. "We thought it had bottomed a few weeks ago."
Some computer chip makers also recovered from Wednesday’s decline. Intel rose $3.38 to $44.69, and PMC-Sierra was boosted $10.56 to $171.69.
But today wasn’t better for AT&T. The telecommunications company fell again, a day after it announced a major restructuring that would break the company into four separate units and dismantle plans to be an all-in-one communications service provider. AT&T also announced Wednesday it was cutting its dividend and warned that fourth-quarter earnings would fall short of expectations. AT&T fell $1.44 at $21.94.
No single stock or sector appeared to drive the Dow. IBM was among the biggest gainers, up $5.75 at $92.75. Decliners included American Express, which lost $2.94 to $54.44.
Declining issues outnumbered advancers by a 12-to-11 ratio on the New York Stock Exchange, where volume came to 1.54 billion shares, down from 1.57 billion on Wednesday.
The Russell 2000 index was up 4.55 at 479.76.
Overseas, Japan’s Nikkei stock average rose 0.12 percent. Germany’s DAX index was up 0.29 percent, Britain’s FT-SE 100 fell 1.02 percent, and France’s CAC-40 also was down 1.10 percent.
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