NEW YORK, DEC. 1 -- The battered stock market regained some composure today after opening the week with big losses, but it lacked the strength to sustain at least two attempts to rally.
Traders said bargain hunting and the dollar's stabilization in foreign exchange trading, which eased inflationary fears, were responsible for the slight rebound. However, they cautioned that the rebound probably isn't sustainable.
"We're in the process of testing and retesting the lows" from the Oct. 19 market collapse, said Ralph J. Acampora, a technical analyst for Kidder, Peabody & Co.
The Dow Jones average of 30 industrials, which tumbled nearly 76 points in heavy trading on Monday, ended today with a gain 8.79 points to 1842.34.
Trading volume on the New York Stock Exchange slowed, with 149.87 million shares changing hands, compared with 268.91 million on Monday.
Broader market measures showed signs of stability. About 10 stocks rose in value for every nine that fell on the NYSE, with 813 up, 748 down and 397 unchanged.
The NYSE's composite index rose 0.81 to 130.50. At the American Stock Exchange, the market value index was off 0.71 to 241.68.
Standard & Poor's index of 400 industrials rose 1.81 to 265.05, and S&P's 500-stock composite index was up 1.70 to 232.00.
The Nasdaq composite index for the over-the-counter market closed at 305.24, up 0.08.
As measured by the Wilshire Associates 5,000 Equity Index, stocks gained $12.12 billion in value, compared with a $98 billion loss on Monday.
The market got off to a solid start on the strength of a rebound by the dollar in Europe and after foreign stocks firmed, with the Dow Jones average rising about 30 points just minutes after the opening bell.
Although always in the positive territory, the market erased most of its gains by noon, but rallied in late afternoon. Traders said some investors saw that as an opportunity to take some profits.
"I think ... the market needs to mark time and establish a trading range. We haven't got over the shock of Oct. 19," said Edward P. Nicoski, a technical analyst for Piper Jaffray & Hopwood Inc.
Some analysts said the market is poised for a rally by the start of the new year.
"To me this market is in the process of getting set to complete a bottom for resumption of a rally that will retrace 50 percent of the total decline," said Gene Jay Seagle, a vice president and director of technical research at Gruntal Financial Inc.
For now, though, the market still has "a lack of confidence in Washington" and remains concerned Congress will reject a $76 billion deficit-reduction compromise reached last month, Acampora said.
Among actively traded blue-chip stocks, Philip Morris rose 1 1/2 to 87 3/8; International Business Machines rose 1/2 to 111 1/4, and General Electric was unchanged at 42