U.S. stocks rose as SBC Communications' first sales increase in 15 quarters sparked a rally in telephone shares and higher-than-forecast earnings at Qualcomm boosted technology companies.

The advance enabled the Dow Jones industrial average to bounce back after starting the day with its first drop below 10,000 in two months.

"After a couple of days like this, some things look more attractive and we may accelerate some purchasing," said Kevin Divney, equity strategist for Putnam Investments in Boston, which handles $213 billion. His firm is buying health care and technology shares, though he declined to name companies.

The Standard & Poor's 500-stock index rose 2.96, or 0.3 percent, to 1096.84. Phone and computer-related stocks had the biggest gains among the benchmark's 10 industry groups. The Dow advanced 4.20, to 10,050.33, after falling as low as 9946.88 during the day. Its last foray below 10,000 was May 25. The Nasdaq composite index climbed 14.69, or 0.8 percent, to 1889.06.

SBC, the second-largest U.S. local telephone company, advanced 38 cents, to $23.58. The company said sales gained less than 1 percent, to $10.3 billion. Verizon Communications, the largest U.S. local phone carrier, gained 48 cents, to $34.61. Nextel Communications increased 26 cents, to $24.72.

Qualcomm jumped $4.82, to $72.50. The company said fiscal third-quarter net income increased to 58 cents a share. Intel, the world's No. 1 semiconductor maker, rose 71 cents, to $23.27. Motorola gained 74 cents, to $15.61, rebounding from Wednesday's 7.6 percent slump.

Starbucks advanced $2.12, to $47.76. The company said third-quarter profit jumped 44 percent. Millennium Pharmaceuticals, which provides drugs for cancer and heart disease, rose 70 cents, to $11.23.

Heavy equipment manufacturer Caterpillar lost $3.42, to $73.53. The 4.4 percent slide was the biggest in the Dow average. Sears, Roebuck fell $1.00, to $33.93. The company said second-quarter profit, excluding some items, was 48 cents per share, below the average analyst estimate of 71 cents.

Other Indicators

* The New York Stock Exchange composite index rose 0.42, to 6390.63; the American Stock Exchange index fell 3.84, to 1244.31; and the Russell 2000 index of smaller-company stocks fell 2.05, to 546.52.

* Declining issues outnumbered advancing ones by 3 to 2 on the NYSE, where trading volume fell to 1.67 billion shares, from 1.68 billion on Wednesday. On the Nasdaq Stock Market, decliners outnumbered advancers by 4 to 3 and volume totaled 1.92 billion, down from 2.07 billion.

* The price of the Treasury's 10-year note rose $1.25 per $1,000 invested, and its yield fell to 4.45 percent, from 4.47 percent on Wednesday.

* The dollar fell against the Japanese yen and the euro. In late New York trading, a dollar bought 109.76 yen, down from 109.96 late Wednesday, and a euro bought $1.2250, up from $1.2241.

* Light, sweet crude oil for September delivery settled at $41.36, up 78 cents, on the New York Mercantile Exchange.

* Gold for current delivery fell to $395.20 a troy ounce, from $397.10 on Wednesday, on the New York Mercantile Exchange's Commodity Exchange.