Tech stocks help markets surge

Associated Press

NEW YORK – Bargain-hunting investors boosted tech stocks today to one of their best performances this month in a spending spree that quickly spilled over to blue chips.

The gains sent the tech-focused Nasdaq composite index up nearly 5.6 percent. The Dow Jones industrial average, which has climbed 580 points since Friday, failed to breach 11,000 but closed up 1.3 percent.

After a month of earnings reports that spooked the market, investors flocked to technology stocks, many of which are trading at their lowest levels since spring, in a broad-based rally.

“I think there’s a Pavlovian syndrome here. Investors have learned to buy on this October weakness. The last two to three Octobers that have been weak and people have stepped in to buy and made a lot of money,” said Bill Barker, an investment consultant with Dain Rauscher.

The Nasdaq shot up 178.15 to 3,369.55, according to preliminary calculations. The Standard &Poor’s 500 index rise 30.73 to 1,429.39.

The Dow closed up 135.37 at 10,971.14, after spending early trading in negative territory following a mixed earnings report from consumer products maker Procter &Gamble.

But by late morning the blue chip index had turned around, on a mix of bargain-hunting and the calendar.

The rally came on the last day of the tax year for mutual funds, which historically has triggered a selloff by fund managers trying to minimize their capital gains taxes.

The gains also came in the last week of third-quarter earnings season, which this year has been plagued by concerns moderating economic growth would hurt corporate profits.

With most of the earnings reports out of the way and tax selling ending for mutual funds, the market zoomed upward.

Telecommunications issues were especially strong. JDS Uniphase recovered $10.06 to $81.38, as did Cisco Systems, which rose $5.81 to $53.88

“We’re seeing a recovery of the technology sector that’s been beaten up so badly,” said Chris Dickerson, an analyst with Global Market Strategists in Gainesville, Ga. “There’s no doubt a lot of this is going to be bargain hunting. There’s a lot of money on the sidelines wanting to come in.”

Dow component Procter &Gamble fell $5.06 to $71.44 but other blue chips more than made up for its shortfall. Banker J.P. Morgan rose $6.13 to $165.50. General Motors also provided a lift, rising $2.31 to $61.19. IBM picked up $5.06 to $98.88.

Also today, the industry group The Conference Board reported that consumer confidence fell sharply in October to its lowest level in a year. The drop could be a potentially worrisome sign for the approaching holiday retail season, but retail stocks held their ground in trading.

Advancing issues outnumbered decliners by a 2-to-1 ratio on the New York Stock Exchange, where volume came to 1.34 billion shares, well ahead of the 1.16 billion a day earlier.

The Russell 2000 index rose 10.96 to 493.18.

Overseas, Japan’s Nikkei stock average rose 0.52 percent. Germany’s DAX index was up 2.18 percent, Britain’s FT-SE 100 rose 0.78 percent, and France’s CAC-40 climbed 1.60 percent.