Stocks surged higher today as bargain hunters returned to help Wall Street rebound from one of its worst weeks ever. But the market remained extremely nervous, and no one was betting that the gains would hold.
At 1 p.m., the Dow Jones industrial average was up 363.06 at 8,598.87 after dropping 1,369.70 last week, its biggest-ever weekly decline. The Nasdaq composite index rose 79.80 to 1,502.99, while the Standard & Poor's 500 index advanced 39.38 to 1,005.18.
With much uncertainty still in the market after the Sept. 11 terrorist attacks, it was likely that technical factors were influencing the market in the early going. Some analysts have described the market as oversold, having fallen precipitously in a very emotional climate.
"Last week, there was kind of a panicky aspect, a throwing in of the towel. I think there is a realization that the lower prices have taken into account a lot of the bad stuff," said Charles Pradilla, chief investment strategist at SG Cowen. "That is not to say that there won't be more pain . . . We will continue to vacillate around."
Goldman, Sachs & Co. strategist Abby Joseph Cohen raised the amount of stocks in her model investment portfolio to 75 percent from 70 percent. She cut her bond allocation to 22 percent from 27 percent, and kept 3 percent in commodities.
Citigroup climbed $2.14 to $38.50, American International Group rose $2.15 to $69.20, and Wal-Mart advanced $1.86 to $46.52.
Airline stocks, which fell sharply because hijacked commercial planes were used in the attacks, rose on a $15 billion government aid package announced over the weekend. The sector was one of the weakest last week as major U.S. airlines reduced flight schedules, and laid off thousands of workers.
AMR, the parent of American Airlines, rose $1.15 $19.05, while Delta gained $1.88 to $24.35.
JDS Uniphase, the biggest maker of parts used in fiber optic networks, jumped 66 cents to $6.02. The company said it is seeing "early signs of stabilization" in its business and completed previously announced work force reductions more quickly than planned. The company now has about 14,000 employees, less than half the 29,000 at the beginning of the year.
Microsoft climbed 80 cents to $50.51, Intel added $1.24 to $20.64, Cisco Systems gained 53 cents to $12.63 and Sun Microsystems rose 43 cents to $8.40.
General Electric, which fell 20 percent last week as investors bet its jet engine, insurance and jet leasing businesses would be hurt by the World Trade Center attack, gained $3.05 to $34.35. Honeywell International, which also depends on commercial aircraft sales, rose $1.24 to $26.04.
Cheap Tickets rose $1.39 to $16.24 after Cendant Corp. said it extended its tender offer for shares of the Internet travel agency to Oct. 5. The offer was set to expire Sept. 21 and some investors had been concerned the acquisition by Cendant would fall apart since the terrorist assault has thrown the travel industry into a crisis. Cendant gained $1.01 to $12.04.