NEW YORK — Wall Street finished a back-and-forth session higher Monday as investors overcame some of their nervousness about the credit markets and uneven earnings and found solace in the technology sector.
Several companies including drug maker Merck & Co. reported decent third-quarter results, but investors were unhappy with rival drug maker Schering Plough Corp.'s results. They were also mindful of the downbeat profit outlooks from several blue chip companies last week.
Disappointing earnings and Standard & Poor's downgrade of another series of mortgagebacked securities sent stocks plunging Friday, taking the Dow Jones industrials down 366 points.
"It is not unusual for a big down day to be followed by an up day. I think the bargain hunters are out there," said Brian Gendreau, investment strategist for ING Investment Management. "It seems there's fairly strong demand out there, despite all the bloodletting on Friday."
The Dow rose 44.95, or 0.33 percent, to 13,566.97, after fallingmore than 100 points early in the session.
Broader stock indicators finished higher, with tech stocks leading. The S&P 500 index rose 5.70, or 0.38 percent, to 1,506.33, and the technology-dominated Nasdaq composite index rose 28.77, or 1.06 percent, to 2,753.93.
The Russell 2000 index of smaller companies added 11.29, or 1.41 percent, to 810.08.
Advancing issues outnumbered decliners by about 9 to 7 on the New York Stock Exchange, where volume came to 3.40 billion shares, compared with 4.05 billion shares traded Friday.
Treasury bonds were little changed after Friday's steep gains. The yield on the 10-year note, which moves inversely to its price, was flat at 4.40 percent.
On Friday - the 20-year anniversary of the Black Monday crash - investors sold off stocks and bought up safer assets like U.S. Treasury bonds as the prospect of a thaw in the frozen credit markets grew dimmer.
Overseas markets were unsettled, responding to Friday's drop on Wall Street.
In Asian trading, Japan's Nikkei stock average declined 2.24 percent, while Hong Kong's Hang Seng index dropped 3.7 percent.
In later European trading, Britain's FTSE 100 fell 1.05 percent, Germany's DAX index fell 1.13 percent, and France's CAC-40 fell 1.38 percent.
Crude oil futures settled down $1.04 to $87.56 a barrel on the New York Mercantile Exchange. Gold also declined, while the dollar rebounded sharply against several major currencies.
Analysts said Monday's upbeat results won't erase all of investors' concerns.
"People are worried there are more time bombs out there," Gendreau said. He posited that a big reason the market sold off as sharply as it did last week was because fund managers wanted to lock in positive returns for the year before any more bad news hits.
Business, Pages 24 on 10/23/2007