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NEW YORK (CNN/Money) -
Bouncing tech shares and falling oil prices helped the Nasdaq rise and the broader market recover late Thursday, at the end of an otherwise tough session for stocks.
The Dow Jones industrial average (down 0.32 to 10,216.59, Charts) and the broader Standard & Poor's 500 (down 0.84 to 1,176.84, Charts) index both ended little changed, while the Nasdaq composite (up 9.75 to 2,047.22, Charts) added 0.5 percent on gains in chips and biotech.
Treasury prices slipped, boosting the corresponding yields, and the dollar was little changed versus other major currencies.
U.S. light crude oil for November delivery lost $1.04 to settle at $63.08 on the New York Mercantile Exchange after sliding as low as $62.45. Oil prices had briefly trimmed losses after the weaker-than-expected oil inventory report.
The major gauges had fallen to fresh five-month lows through the early afternoon amid ongoing worries about inflation and the economy, following the morning's discouraging read on the trade gap. However, gains in tech, health care and biotech helped the market recover some in the late afternoon.
Oil stocks were among the worst performer of the session, with the Amex oil (down 22.82 to 961.09, Charts) index dropping more than 2 percent. However, the sector managed to close off its worst levels, and that modest recovery helped the broader market rebound somewhat in the afternoon.
Gains in a handful of large-cap stocks also edged the markets into positive territory in a choppy trading session, with some investors out in observance of the Yom Kippur holiday.
"Hardware, software and semiconductors are the three top-performing groups right now, and there has been a decline in oil prices," said Hugh Johnson, chairman of asset management company Johnson Illington Advisors. "These things are pushing the markets up."
Worries hang
In morning action, stocks had extended losses posted throughout the week as investors bailed out of energy stocks, 2005's leading sector, amid bets that oil prices had peaked and in response to the debacle at Refco.
Stocks have slumped for more than a week on concerns about inflation and interest rates. Tim Heekin, head of stock trading at Thomas Weisel Partners, said these worries remained firmly in place Thursday, with market participants nervous about Friday's economic reads, including reports on consumer prices and retail sales.
Not helping inflation-worried investors was the August trade gap report, released in the morning.
The U.S. trade deficit rose to $59 billion in the month, reflecting the impact of rising oil prices, versus $58 billion in July. Economists were expecting an even bigger rise to $59.5 billion, according to Briefing.com forecasts.
A separate report showed a smaller-than-expected decline in weekly jobless claims last week.
Treasury prices fell, raising the 10-year note yield to 4.46 percent from 4.44 percent late Wednesday. Treasury prices and yields move in opposite directions.
The dollar was little changed versus the euro and higher versus the yen.
COMEX gold fell $2.80 to close at $473.80 an ounce.
Market movers
Shares of Apple (up $4.49 to $53.74, Research) and Advanced Micro Devices (up $0.63 to $21.63, Research) both bounced back after getting hit Wednesday on disappointment about their earnings reports.
Shares of Lam Research (up $3.55 to $33.75, Research) gained nearly 12 percent after reporting earnings late Wednesday that dipped from a year ago, but surpassed estimates. The chip gear maker also said that the downturn in its business seems to have ended and that demand should pick up through the end of 2005 and into 2006.
Morgan Stanley also upgraded the stock Thursday morning.
Chips were stronger across the board, lifting the Philadelphia Semiconductor (up 9.36 to 446.33, Charts) index, or the SOX, up 2.1 percent. In total, 17 out of 19 components gained, led by Novellus Systems (up $1.26 to $24.94, Research) and KLA-Tencor (up $1.83 to $48.36, Research).
Among blue-chip gainers, Johnson & Johnson (up $2.22 to $64.02, Research) rose 3.6 percent. The health care leader gained after filing an antitrust suit against rival Amgen (up $1.05 to $75.82, Research), and benefited from a bullish mention in financial weekly Barron's.
Ford (up $0.30 to $8.99, Research) shares rose 3.5 percent after the company announced Anne Stevens would step up as chief operating officer at its troubled Americas division.
McDonald's (up $0.38 to $32.05, Research) rose 1.2 percent after the fast-food chain said September same-store sales rose 3.9 percent from a year ago, and that it expects strong third-quarter earnings.
In other news, Refco (down $2.95 to $7.90, Research) shares were halted shortly after the start of trade and remained closed throughout the session. In late morning, the embattled commodities broker announced that it had put a 15-day moratorium on any activity at its Refco Capital Markets subsidiary because of a lack of liquidity.
The company also said it had taken on two new advisers, including former Securities and Exchange Commission Chairman Arthur Levitt.
Refco stock slumped at the open before being halted. Refco shares have fallen for four days now amid an accounting scandal that has seen its former CEO indicted for securities fraud.
Google (down $3.53 to $297.44, Research) and Comcast (down $0.72 to $27.20, Research) are in discussions with Time Warner about buying a minority stake in the company's America Online unit for as much as $5 billion, a source close to the situation told CNN/Money. The potential deal was first reported in the Wall Street Journal. Time Warner is the parent of CNN/Money.
Shares of both Google and Comcast slipped.
Market breadth was mixed. On the New York Stock Exchange, losers beat winners by nearly two to one on volume of 1.82 billion shares. On the Nasdaq, decliners and advancers were pretty evenly split on volume of 1.8 billion shares.
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