Tech stocks lead comeback try

NEW YORK (CNNMoney.com) -- Technology shares bounced Monday, helping the broader market erase losses, as investors tiptoed back into stocks after last week's big selloff.

The Dow Jones industrial average (Charts) added 0.3 percent, with 2-1/2 hours left in the session, erasing morning losses. The S&P 500 (Charts) index added 0.3 percent, also erasing morning losses. The Nasdaq composite (Charts) gained 0.9 percent, after having swayed on both sides of unchanged.

The Dow lost 367 points Friday - the 20th anniversary of the Black Monday crash - at the end of a rough week on Wall Street in which record-high oil prices, more problems in the bank sector and slower corporate earnings growth revived worries about an economic slowdown.

These concerns continued to weigh on U.S. stocks through the morning Monday - and also dragged on global markets, with Asian and European markets falling.

But the declines Monday morning were slim and the market turned higher in the afternoon, with big tech stocks such as Yahoo! (Charts, Fortune 500) and Microsoft (Charts, Fortune 500) leading the charge.

After a "disturbing week," investors likely came back to work this week expecting the worst, said Ted Weisberg, NYSE floor trader at Seaport Securities.

When Wall Streeters didn't get any terrible news, and in fact got some decent earnings, and a retreat in commodity prices, that helped stocks bounce back a little, he said.

"The day isn't over and we could still turn around, but I suspect the market is a little oversold short term," he said. "So any positive earnings surprises this week will probably give the market a lift."

Dow component Merck (Charts, Fortune 500) reported higher quarterly earnings and boosted its 2007 earnings outlook. Merck gained 2 percent.

SanDisk (Charts), a maker of flash memory cards, announced a new product that will allow people to move files from their computers to their television, a direct challenge to Apple. (Full story)

Dow component Exxon Mobil (Charts, Fortune 500) was one of several oil services firms falling along with the price of oil.

Oil prices retreated $1.85 to $86.75 a barrel on the New York Mercantile Exchange. On Friday, oil briefly hit an all-time high of $90.07 a barrel in electronic trading.

COMEX gold for December delivery fell $12.40 to $756 an ounce.

On Friday, while stocks and the dollar fell, oil and gold prices rallied as investors sought safety for their investments.

Although Merck offered some upbeat earnings, other earnings news has been mixed. Schering-Plough (Charts, Fortune 500) said Monday that earnings and revenue rose from a year ago, but missed estimates. Shares slumped 13 percent.

With 26 percent of the S&P 500 earnings out, third-quarter growth is currently on track to have fallen 0.1 percent from a year ago, according to the latest Thomson Financial figures.

Investors were also digesting comments from Friday's G7 meeting of the world's leading economic powers. The ministers predicted slowing global growth and also said that they would do what they could to limit the damage from the credit crisis.

Treasury prices fell, raising the yield on the benchmark 10-year note to 4.43 percent from 4.39 percent late Friday. Bond prices and yields move in opposite directions.

In currency trading, the dollar gained versus the euro and fell versus the yen.