Oil, Techs Lead Stocks Higher; Yields Climb

Stocks found their footing and managed modest gains Tuesday, a day after worries about Asia triggered steep declines in markets around the world.

Oil and computer stocks, which suffered the most in Monday’s decline, led the gains.

Meanwhile, the yen rallied against the dollar on speculation the United States may try to help stem the yen’s recent slide. In late New York trading, the dollar fell to 143.47 yen from 146.15 on Monday.

The Dow Jones industrial average rose 37.36 points, or 0.4%, to close at 8,665.29, while the Standard & Poor’s 500 index gained 10.58 points, or 1%, to 1,087.59. The Nasdaq jumped 37.37 points, or 2.18%, to 1,753.12.

“Investors tend to love to buy on dips, and we’ve seen a pretty big dip here in a pretty short period of time,” said Gary Campbell, chief investment officer at Commerce Bank Investment Management Group, which manages $8.3 billion. Bond yields are near record lows and Monday’s 207-point drop in the Dow brought the blue-chip index to a three-month trough.

Bond prices posted their biggest drop in almost seven weeks Tuesday as the dollar fell against the Japanese yen and stock markets around the world rebounded somewhat.

The yield on the benchmark 30-year Treasury bond rose to 5.66% from 5.57% on Monday.

In a reminder of how fragile corporate profits are, shares of temporary-employment company Manpower plunged $10.50, almost 28%, to $27.69 on Tuesday after the company warned late Monday that second-quarter earnings will drop because of unexpectedly high expansion costs and reduced French tax credits.

Oil and oil service stocks rose, erasing some of Monday’s losses, as the price of crude bounced back from Monday’s drop to a 12-year low. Noble Drilling rose $1.38 to $24.25. Mobil gained $1.50 to $75.25.

Crude oil rose 42 cents to close at $11.98 a barrel on the New York Mercantile Exchange as key producers announced further output cuts of 170,000 barrels a day to ease a worldwide glut.

Battered computer stocks rallied. Intel rose $2.94 to $69.81, Microsoft added $3.94 to $89.88 and Compaq Computer rose $1.19 to $28.31. Dell Computer, down 18% in the last month, rose $4.72 to $84.97.

IBM was an exception, falling $2.25 to $110. Merrill Lynch analyst Steven Milunovich cut his earnings estimates on the world’s largest computer maker, saying the strong U.S. currency could cut revenue growth by 3.5% this year.

The dollar’s recent surge is hurting profits for U.S. exporters by making their products more expensive abroad and returning fewer dollars when they bring their overseas earnings home.

Other broad-market indexes rose. The Russell 2,000 index of smaller companies rose 4.51 points to 438.37.

In Asia, Malaysian shares tumbled 3.6%, while key stock indexes fell 2.8% in South Korea, 2.3% in Thailand and 1.7% in Indonesia. Tokyo’s Nikkei fell 0.7%.

In early overnight trading, however, Asian markets reversed their declines. Hong Kong’s Hang Seng index was up 3.5%, rebounding for a second day after its steep 5.7% loss on Monday. South Korea surged 5% on the rally in the yen. Singapore rose about 1%, while Taiwan and Indonesia each gained about 2%.

In Europe, Frankfurt’s DAX index rose 1.2% on Tuesday and London’s FTSE-100 rose 0.2%.

Among Tuesday’s market highlights:

* Time Warner jumped $4.63 to $77.81 as analyst Jill Krutick of Salomon Smith Barney reiterated a “buy” rating on the entertainment and media company. On Monday, Microsoft and Compaq said they each invested $212.5 million for 10% stakes in Time Warner and MediaOne Group’s Road Runner venture, which provides high-speed Internet access over cable TV lines.

* Clear Channel Communications rose $1.69, or 1.7%, to $102.75, after the largest U.S. outdoor advertising company agreed to acquire closely held broadcaster Dame Media for $85 million in stock and assumed debt, expanding its reach in New York and Pennsylvania.

Market Roundup, D10