Technology stocks led the market to its strongest performance of the month as investors hunted for bargains among shares that have been beaten down in recent sessions.
The Dow Jones industrial average gained 115.88 points, or 1.1 percent, to close at 10,979.04. The blue-chip index rose as much as 168 points during the session, rebounding strongly from Monday's shiftless 47.80-point loss.
Broader indicators were also higher. The Standard & Poor's 500-stock index rose 15.08, to 1362.84, and the Nasdaq composite index rose 60.13, to 2679.32.
A wide range of computer-related stocks soared, helping the Dow and the technology-dominated Nasdaq alike. Computer makers rose, including IBM, up 3 1/4 at 126 1/4, and Hewlett Packard, up 3 9/16 at 109 1/4. Chipmaker Intel gained 4 11/16, to 67 9/16, after a Wall Street analyst raised his 1999 earnings forecast.
After last week, when the Nasdaq dropped 172.08 points, a loss of 6.1 percent, analysts said investors were ready to scoop up tech stocks at their discounted prices.
Investors had several diverse reasons for swinging away from technology stocks last week. The shares had been bid to record highs at the start of July on the promise of strong corporate earnings. As a majority of high-tech companies met or beat expectations, many investors sold off their shares, hoping to lock in profits.
Technology stocks were also threatened after Federal Reserve Chairman Alan Greenspan indicated the Fed remains willing to raise interest rates if it determines that doing so would hold off inflation.
Banks and brokerages also rallied today. American Express rose 5 7/8 after the release Monday of a strong earnings report.
A modest rise in bond prices helped stocks. Stocks and bonds received some support from a Conference Board report that showed consumer confidence declined in July, after eight months of consecutive gains and a rise to a 30-year high.