NEW YORK (CNNfn) - The Dow Jones industrial average rose Monday, climbing for a third straight session, after a series of surprisingly strong financial results lifted several of the index's stocks.
Minnesota Mining & Manufacturing and SBC Communications topped Wall Street's quarterly profit forecasts, bringing the Dow's three-day advance to 3 percent following six weeks of losses. And Honeywell International also lifted the index after General Electric offered to buy the technology conglomerate for $45 billion.
But the Nasdaq composite index edged lower, as investors bet recent gains in stocks such as Microsoft and Oracle were overdone.
 "There is still some overvaluation in the tech sector," John Carey, portfolio manager at Pioneer Investment, told CNNfn's Talking Stocks.
The Nasdaq's slide marks a return to a recent pattern for the tech index, which has fallen steadily since the end of August.
Still, Richard McCabe, chief market analyst at Merrill Lynch, forecasts that most of the market's losses are over.
"I see a lot of technical momentum indicators as very oversold," McCabe told CNN's Street Sweep.
At the same time, McCabe says investor sentiment may not yet be negative enough to foretell a market bottom.
The Dow rose 45.13 points to 10,271.72. The Nasdaq lost 14.44 points to 3,468.70. And the S&P 500 slipped 1.15 to 1,395.78.
Market breadth was mixed. Declining issues on the New York Stock Exchange outpaced advancing ones 1,582 to 1,277, on volume of 1 billion shares. But Nasdaq winners beat losers 2,072 to 1,873, as more than 1.6 billion shares changed hands.
 The day's selective advances mark a sharp contrast from earlier this month, when the Dow closed below 10,000 for the first time since March and the Nasdaq posted its lowest close of the year.
Charles Payne, head analyst at Wall Street Strategies, was encouraged by some of the gains. "This tells me that nobody wants to be left behind if this thing takes off," Payne said of the market.
Payne said he will be watching another week of corporate results, paying close attention to reports from Amazon.com, Compaq Computer and Verisign.
In other markets, Treasury securities edged higher. The dollar gained against the euro but fell versus the yen.
Wall Street searches for bottom
Investors hoping for more than two days of stock gains had to settle for a mixed performance. After rising Thursday and Friday to post their first positive week since August, stocks showed pockets of strength Monday.
Richard Cripps, chief market strategist at Legg Mason Wood Walker, told CNNfn's Market Call that last week's rally appears to be comforting investors. (413K WAV) (413K AIFF).
Among the gainers, 3M (MMM: Research, Estimates) added $2.56 to $89.81 after reporting a record third-quarter profit of $499 million, or $1.25 a share, a penny better than forecasts and above the $462 million, or $1.14 a share, earned in the year-earlier period.
 Another Dow component, SBC Communications (SBC: Research, Estimates), rose $3.38 to $54.13 after announcing it earned $1.96 billion, or 57 cents a share, in the third quarter, down from $1.97 billion in the year-earlier period, which also came to 57 cents a share. Still, the results beat forecasts by a penny.
But on the Nasdaq, two days of gains gave way to losses. Oracle (ORCL: Research, Estimates) shed $1.19 to $34.06 and Microsoft (MSFT: Research, Estimates) declined $3.06 to $62.13.
General Electric (GE: Research, Estimates), meanwhile, fell $2.50 to $49.75 after saying it will buy Honeywell International (HON: Research, Estimates), the diversified manufacturer, for $45 billion.
Honeywell rose $3.94 to $49.94.
The merger will create a vacancy in the Dow, whose components were last changed in 1999 when Microsoft, Intel and two other issues replaced four stocks.
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In other stocks in the news, Lucent Technologies (LU: Research, Estimates), whose stock has lost more than 50 percent of its value this year, continued falling even after announcing management changes. Lucent lost 56 cents to $22.06 after naming Henry Schacht to take over as the company's chairman and chief executive officer, replacing Richard McGinn.
The maker of telecommunications equipment after the close of trading posted earnings of 18 cents per share, one penny above analysts' reduced expectations.
In other earnings, American Express Co. (AXP: Research, Estimates) lost $1.69 cents to $54.38. The company said net income rose to $737 million, or 54 cents a diluted share, matching forecasts.
On Monday, the gains were isolated. Drug stocks such as Merck (MRK: Research, Estimates) advanced, climbing $2.88 to $87.75. In addition to SBC, other telecom stocks such as AT&T and WorldCom also rose.
But in a potential negative, oil prices rose Monday, a trend that could raise costs for business and slow consumer spending.
"It's one dragon we haven't slain," Ash Rajan, senior vice president at Prudential Securities, told CNN's Street Sweep. Rajan says the market won't be calmed until oil prices fall to the $28 a barrel range.
Oil futures for December delivery rose 81 cents to $33.76 a barrel.
Still, some analysts see market positives. The end of the year is typically a good time for Wall Street. And many believe much of the selling by mutual funds for tax purposes is over.
"There's just a natural inflow of capital that comes into market at year-end," Paul Rabbitt, president of Rabbitt Analytics, told CNNfn's market coverage.
The end of the presidential race in two weeks may also lift Wall Street, which often frets over political uncertainty.
Continued gains would be good news for stock investors. If the year ended today, the three major stock indexes would post their first collective declines since 1990. For the year, the Nasdaq is off 22 percent, the Dow down 11 percent and the S&P 500 off by 5 percent. 
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