The stock market rebounded Tuesday and the Dow Jones industrial average climbed back past the 4,000 mark.
The Dow closed at less than a point below its all-time high. After hovering near its starting point for most of the session, it advanced decisively in the last 90 minutes of trading to finish at 4,011.05, up 22.48 points and within one point of the record closing mark of 4,011.76 set Friday.
The gain almost erased Monday's drop of 23.17. Takeover news about technology issues and other stocks inspired buying, as did a recovery in the bond market.
Treasury bond yields ended mixed, with the key 30-year bond yield falling to 7.44% from 7.47 on Monday. Its price, which moves in the opposite direction, rose 5/16 point, or $3.13 cents per $1,000 in face value.
In staging its comeback, Wall Street managed to overcome uneasiness about the implications of the collapse of a venerable old British merchant bank and uncertainty about the direction of U.S. interest rates in the near future.
Most of the broad market gauges also gained. The New York Stock Exchange composite index rose 1.97 points to 264.65. Standard & Poor's 500 stock index increased 3.57 points to 487.38. The Nasdaq composite climbed 9.23 points to 793.73; the American Stock Exchange market value index rose 4.27 to 452.71.
Advancing Big Board stocks beat declining ones by about 7 to 3. Volume on the NYSE floor came to 317.61 million shares, compared to 285.80 million shares traded Monday.
The renewed buying in the bond market helped stocks. For most of the day, bonds were suppressed in reaction to a Chicago area purchasing managers' report that contained hints of inflation. Analysts said technical factors triggered bond buying in the afternoon.
Rebounds in Asia's major financial centers also helped restore stock buying interest here.
Tokyo 225-issue Nikkei average closed at 17,053.43, up 244.73 points, after plunging 3.8% on Monday. Hong Kong's Hang Seng Index rose 192.57 points to close at 8,319.22, more than recouping Monday's 1.1% fall.
Elsewhere, London's FT 100-share average closed down 8.2 points at 3017.1. Germany's DAX 30-share average ended up 2.93 points at 2,102.18.
Among Tuesday's highlights:
* German chemicals giant Hoechst and Dow Chemical said they were in talks on the possible sale to Hoechst of all of the outstanding shares of Dow's Marion Merrell Dow Inc. affiliate for $25.75 a share. Dow Chemical gained 2 3/8 to 67; Marion Merrell Dow rose 1 to 24 7/8.
* Morgan Stanley Group rose 1 1/4 to 67 3/8 after the company posted fourth-quarter earnings that were stronger than some analysts had expected.
* CBS rose 2 5/8 to 64 5/8 in response to news that Turner Broadcasting had expressed renewed interest in acquiring the network.
* Wal-Mart Stores rose 3/8 to 23 3/4 after it reported record earnings.
* Quantum Health Resources fell 6 3/4 to 22 after reporting earnings that disappointed Wall Street analysts.
* AST Research rose 1 13/16 to 16. Samsung Electronics has agreed to buy a 40.25% stake in AST for about $378 million. The news rekindled interest in the technology sector. Motorola rose 2 to 57 1/2.
* National Gypsum soared 4 3/4 to 49 1/4 after receiving a $1.1-billion takeover offer.
* Mexican stocks remained a focus of attention as investors assessed the country's economic prospects. Grupo Televisa rose 1 1/4 to 16 1/2 and Grupo Tribasa rose 3/8 to 5 7/8. Telefonos de Mexico rose 1/8 to 27.