Key technology and industrial stocks rebounded on Thursday from this week's drubbing, pulling the broad market up with them.
The Dow Jones industrials meandered throughout the morning but shot higher at midday, ending up 22.04 points at 4,762.71 and breaking a three-day losing streak.
The Nasdaq composite index of mostly smaller stocks jumped 11.93 points to 1,014.20 after a sharp selloff in the three previous sessions.
Despite the indexes' gains, however, winners had only a slim lead over decliners on the New York Stock Exchange and in the Nasdaq stock market.
Indeed, there was more nervousness in the market than the indexes might suggest, especially with growing expectations that pending third-quarter corporate earnings reports will be largely disappointing.
"The feeling is that the market's probably just fine" despite recent profit-taking, said John Burnett, a stock trader at Donaldson, Lufkin & Jenrette Securities. "But we are up against some pretty lofty levels, and a number of stocks that look like they should have broken out on the upside did not. There's just a little bit of a ceiling on things."
Technology shares dropped sharply in early trading, following Wednesday's selloff. But bargain hunters flocked to tech shares in the afternoon.
"They tried to break them, but they're finding some buyers coming in," said Leon Brand, a global market strategist at NatWest Securities.
Bonds provided support for stocks. Long-term Treasury bond yields eased to new 20-month month lows ahead of today's report on September employment. Many bond traders are betting that the economy will remain weak enough to merit another interest-rate cut by the Federal Reserve Board later this year.
The 30-year Treasury bond yield dipped to 6.42% from 6.43% on Wednesday.
The September unemployment rate is expected to hold steady at 5.6% on job gains of about 195,000.
In what could be a preview of that number, the Labor Department said Thursday that first-time claims for unemployment benefits rose by 6,000 last week, the biggest increase in three weeks. Many analysts had expected an increase of about 8,000.
Elsewhere Thursday, the dollar fell against the Japanese yen and the German mark as investors lost hope that a weekend meeting of ministers of the seven leading industrial nations would do much to bolster the greenback.
In New York the dollar ended at 99.40 yen, down from 100.95 yen Wednesday. But the decline failed to rattle stocks or bonds.
Among Thursday's highlights:
* Among tech issues, Micron Technology surged 3 3/8 to 74 1/2 and had second-highest volume of the day, with 5.7 million shares changing hands. Texas Instruments rose 1 3/8 to 74 7/8. IBM added 3/4 to 94 1/2.
In Nasdaq trading Intel was the biggest volume mover, with 9.9 million shares changing hands; its price rose 2 3/16 to 60 7/8. Microsoft rose 1 3/8 to 87 1/2, and Bay Networks shot up 5 to 55 3/8.
* Cyclical stocks--those that tend to move in tandem with the economy--led the Dow industrials higher. Alcoa rose 2 to 51 1/2, DuPont rose 2 to 67 1/8 and Allied Signal rose 1 3/8 to 44 1/8.
Brand pointed out that many of these companies are also multinational and so they were seen as benefiting from Thursday's weaker dollar.
* Retail stocks, meanwhile, were mixed as largely disappointing September sales figures were released throughout the day. Sears, Roebuck rose 1 1/4 to 36 5/8 after the Chicago-based chain said sales at stores open at least a year rose 4.5% in September.
Wal-Mart closed unchanged at 23 7/8 after reporting a 4.2% rise in same-store sales. The Gap gained 2 1/2 to 38 1/4 on its report of a 3% gain. And Dayton Hudson added 1 7/8 to 74 1/2 after it said same-store sales rose 5.3%. But Kmart fell 11/16 to 12 13/16 after it reported that sales rose 4.1% in September, and J.C. Penney fell 3/8 to 47 5/8 after saying its sales fell 0.9%.
In commodities trading, oil prices plummeted on a rumor that Iraq is considering accepting a standing U.N. offer to make a onetime sale of crude for humanitarian reasons.
Iraqi officials in Baghdad and at the United Nations said the rumor was untrue, but market reacted nonetheless to the hint that Iraq's embargoed oil could flood the market.
November crude oil futures fell 43 cents to $16.87 a barrel in New York, reaching a 10-week low.
Meanwhile, prices of cotton, lumber and energy contracts dropped amid a sense of relief that Hurricane Opal did not wreak catastrophic damage to those industries.
In overseas trading, Tokyo's 225-share Nikkei average finished up 75.33 points, at 18,220.41. London shares ended little changed, with the FTSE-100 closing at 3,544.4, up 0.3 point.
In Mexico, the 37-share Bolsa index closed up 80.52 points at 2,347.65. Activity was heavy at 134 million shares.