Wall Street rallied Wednesday, sending the Dow Jones industrial average up more than 160 points in a stronger-than-expected rebound from the earnings-driven selling that pummeled the market earlier this week.
Still, while the advance accelerated late in the session, analysts weren't impressed. They noted there is still no clear sign of when business and profits are going to turn around.
"It was a pretty healthy market today, but I don't think this rally is sustainable," said Bill Barker, investment strategy consultant at Dain Rauscher, who attributed much of the market's rise to hedge funds and computer-program buying rather than a shift in investor attitude.
"We still have a lot of earnings problems ahead that are going to keep a cap on this."
The Dow closed up 164.55 points, or 1.6%, at 10,405.67, recovering nearly half the 335 points it lost Monday and Tuesday.
Broader stock indicators also rebounded from significant losses. The Standard & Poor's 500 index rose 18.84 points, or 1.6%, to 1,190.49, and the Nasdaq composite index gained 25.08 points, or 1.3%, to 1,984.32.
All three indexes are above their lows for the year but are well off where they started 2001. The Dow is off more than 3%, the S&P; down nearly 10% and Nasdaq has fallen close to 20% year to date.
A rebound had been expected Wednesday after the sharp decline of the last few sessions, as lower prices made some stocks look more attractive. But few believed the advance was anything more than a temporary reprieve from the earnings worries that have plagued the market.
Investors still feel no urgency to buy, said Barker, of Dain Rauscher. Instead, they're waiting for companies to give some indication that earnings have stabilized, something few have been able to do.
Even the prospect of an August interest-rate cut--the seventh of the year--isn't expected to trigger a comeback on Wall Street, which remains fixated on earnings. As a result, investors have been more inclined to sell than buy.
Still, after three straight sessions of concentrated selling, investors were in the mood Wednesday to reward companies that delivered good earnings news. SBC Communications rose $2.58 to $43.38 after beating Wall Street estimates. The stock is a Dow component and contributed significantly to the blue chips' rise.
Investors also bid Texaco higher, up $3.13 at $67.55, after the company beat earnings expectations and said its merger with Chevron should be completed this fall. Chevron rose $3.99 to $89.17, and Exxon Mobil, the biggest U.S. oil company and a Dow member, rose $1.16 to $42.13.
Technology advanced, although most of its gains came late in the day. Cisco Systems gained 32 cents to $18.70 and Intel added 54 cents to $29.42.
After the market closed, Corning released second-quarter results that beat expectations, but the company, whose business includes fiber optics, stopped short of saying when conditions would improve. The stock rose 47 cents to $14.24 in after-hours trading, adding to a 26-cent gain during the regular session.
There also was some bargain hunting of blue chips that had suffered in recent sessions. Among Dow stocks, Alcoa rose $1.83 at $39.06, and 3M advanced $3.30 to $110.36.
Advancing issues led decliners 3 to 2 on the New York Stock Exchange and by a slim 9 to 8 on Nasdaq. Trading was active.
Among other market highlights:
* Software maker PeopleSoft surged $4.16 to $38.40 after the company's second-quarter earnings beat Wall Street's forecasts. Among other software makers, Siebel gained $2.66 to $33.69, Oracle rose $1.05 at $19.26 and Microsoft was up $1.16 to $67.48.
* Lucent Technologies, the NYSE's most heavily traded stock, rose 24 cents to $6.67 after Lehman Bros. raised its rating on the struggling telecommunications equipment maker to "strong buy" from "neutral" in the belief the company will improve its balance sheet.
* Schlumberger, the world's No. 2 oil field services company, gained $2.78 to $56.48 after saying earnings rose 20% as strong oil and natural gas prices during the quarter drove a recovery in energy companies' spending on exploration and production.
* Bond prices suffered their biggest one-day drop in almost a month as a weakening dollar and rising stock prices drew investors away from government issues. The yield on the benchmark 10-year Treasury note--which moves opposite of the price--rose to 5.18% from its Tuesday close of 5.11%.
Market Roundup, C9-C10