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Nasdaq bounces back
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October 19, 2000: 5:14 p.m. ET
After getting too cheap to ignore, stocks draw buyers on solid earnings
By Staff Writer Jake Ulick
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NEW YORK (CNNfn) - The Nasdaq composite index rallied to its third biggest gain on record Thursday after surprisingly strong earnings from several technology firms eased some of the profit fears that plagued Wall Street since Labor Day.
Financial results from Microsoft, Nokia and Sun Microsystems all topped forecasts. Investors sent the three stocks rocketing by an average of 18 percent exactly one week after the Nasdaq tumbled to its lowest close of the year.
The technology gains spread to the Dow Jones industrial average, which climbed above the 10,000 level it closed beneath Wednesday for the first time since March.
 What a difference a day makes. Just Wednesday, the latest round of financial jitters sent stocks reeling.
"I think we are down to levels were people have said enough is enough," Michael Holland, chairman of Holland & Co., told CNN's Street Sweep.
But even with the latest gains, the indexes are not much above their lowest levels of the year. The day also marks a historic milestone. Thursday's advance comes on the 13th anniversary of the Dow's biggest loss on record: Black Monday, when the index lost almost a quarter of its value.
The Nasdaq Thursday surged 247.04 points, or 7.79 percent, to 3,418.60 and its third largest gain. The advance is outdone only by Friday's 7.87 percent jump and May 30's record 7.94 percent rally. Thursday's rise put the Nasdaq higher for the week, an advance that -- if its holds -- would mark the indexes' first positive week since August.
But the year remains solidly negative, with the Nasdaq off 16 percent in 2000.
The Dow gained 167.96, or 1.7 percent, to 10,142.98, narrowing its annual loss to 12 percent. The S&P 500 leapt 46.63, or 3.5 percent, to 1,388.76 but it is 6 percent lower in 2000.
 More stocks rose than fell in heavy trading. Advancing issues on the New York Stock Exchange beat declining ones 1,962 to 916, on volume of 1.2 billion shares. Nasdaq winners topped losers 2,837 to 1,158, as more than 2.3 billion shares changed hands.
In other markets, Treasury securities were mixed. The dollar fell against the euro but rose versus the yen.
Something different: A rally
After six straight weeks of losses that sent the Nasdaq down nearly 40 percent from its March high, investors are searching for any signs that the worst is over.
"As we wrote today, it's always darkest before dawn," Andrew Barrett, technology analyst at Salomon Smith Barney told Street Sweep. "I think most of the selling is probably overdone."
 Holland & Co.'s Holland, meanwhile, saw positives in the market's ability to holds gains in the often unpredictable last hour of trading.
The day's action comes exactly 13 years after Black Monday. On Oct. 19, 1987, the Dow plunged 508 points, or 22.6 percent, its worst loss on record.
While September and October have been tough months, no recent loss has approached that one. Still, some stocks have become relatively inexpensive recently, drawing buyers.
Microsoft (MSFT: Research, Estimates) earlier this week fell below $50, nearly a 52-week low. But shares of the software maker surged $10.13 to $61.88 Thursday after posting first-quarter net income of 46 cents per share, 12 percent above the mean analyst estimate of 41 cents.
Sun Microsystems (SUNW: Research, Estimates) gained $7.38 to $117.69 after the company said it earned 30 cents per share during the latest quarter, up 85 percent from a year ago and 4 cents better than forecasts.
And Nokia (NOK: Research, Estimates) rose $8.13 to $38.13. The world's biggest mobile phone maker posted a 42 percent jump in pretax third-quarter earnings, surpassing analysts' lowered estimates.
Click here for a full look at the day's corporate results
The reports calmed a market worried that tech growth would slow with the economy.
"We knew deep down there was some good news in the bottom line, but we were beginning to have our doubts," Larry Wachtel, market analyst at Prudential Securities, wrote in a note to clients.
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Intel (INTC: Research, Estimates), pummeled this fall on a warning about slowing sales, also surged, rising $3.75 to $41.94, lifting both the Nasdaq Dow.
Financial stocks also bolstered the blue chip index. J.P. Morgan (JPM: Research, Estimates) surged $8 to $142.25, American Express (AXP: Research, Estimates) gained $1.81 to $56.06, and Citigroup (C: Research, Estimates) advanced $1.75 to $51.31.
But drug stocks, traditional defensive issues that have performed well this year, pulled back. Johnson & Johnson (JNJ: Research, Estimates) lost $2.50 to $91.75 and Merck (MRK: Research, Estimates) shed 63 cents to $77.56.
 But at least one company warned that the worst isn't over. Apple Computer (AAPL: Research, Estimates) shed $1.19 to $18.94 after it posted weaker-than-expected fiscal fourth-quarter profit of 30 cents a share. The computer maker also warned investors that the current quarter's results will be substantially below Wall Street's expectations.
After Thursday's rally, analysts will pay attention for any follow-through Friday, a session with no major earnings reports to jolt stocks.
Bryan Piskorowski, market analyst for Prudential Securities, told CNNfn's market coverage said he needs to see more sustained rallies before concluding the market has bottomed. (448K WAV) (448K AIFF)
Fed sees little impact from oil prices
In a speech last Friday, Fed Chairman Alan Greenspan said nothing to harm the markets. Greenspan indicated he is watching the effects of higher oil prices closely, but noted that at least so far, these had been modest.
The comments to a Washington audience seemed to slightly de-emphasize the threat of inflation outlined in a Federal Reserve statement earlier this month.
The central bank left interest rates steady Oct. 3 and many expect the Fed to stay on hold through the rest of 2000.
Crude oil futures rose. December crude oil on the New York Mercantile Exchange gained 23 cents to $32.70 a barrel 
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