Techs rally for 2nd session
Nasdaq jumps for the second session in a row, while the Dow and S&P 500 end barely higher.
NEW YORK (CNNMoney.com) -- Stocks gained Wednesday, with tech stocks leading the way, as the Dow Jones industrial average squeaked out a higher close for the second session in a row for the first time in five weeks.
After the close, mortgage lender Freddie Mac reported its sixth straight quarterly loss and asked the government for another $30.8 billion.
The Dow Jones industrial average (INDU) added 4 points, or less than 0.1%. The S&P 500 (SPX) index added 2 points, or 0.2%. The Nasdaq composite (COMP) rose 13 points, or 1% and has now gained 8% in two sessions.
Stocks had rallied in the early going and seesawed through the afternoon before making another rally attempt near the close. The session was buffeted by plunging oil prices and ongoing worries about the bank sector.
The market rose Tuesday, with all three major gauges posting their biggest gains of the year. Citigroup (C, Fortune 500) cooled some worries about its future after it said that it was profitable in the first two months of the year, surprising investors who have been worrying that it can't stay afloat. Financial stocks also gained after regulators said they may reinstate the "uptick rule" that stops short sellers from driving a floundering stock lower.
The Dow and S&P 500 ended Monday's session at 12-year lows and the Nasdaq at 6-year lows, following over two months of selling on worries about the global recession.Tuesday's advance was partly in response to that rout.
However, it's too soon to tell if a so-called market bottom was put in place, analysts say. Many market pros thought stocks had bottomed in October and then in November and as the recent selloff showed, that proved not to be true.
"Until proven otherwise, we're in a bear market and this is a rally in a bear market and not something more," said Gary Flam, portfolio manager at Bel Air Investment Advisors.
Flam said that typically the biggest rallies occur in bear markets. He also said that he doesn't buy the argument that since Citigroup said it might be profitable, and the uptick rule might be reinstated, that the market is now on better footing.
"Financials need to bottom first because they are important in terms of driving the market, but also because the sector plays a big role in the economy," Flam said. "The fact that the banking institutions have not been stabilized is the reason the economy has not been stabilized.".
As of Wednesday, the Dow is off 21% year-to-date, the S&P 500 is down 20% and the Nasdaq is down 14%.
Thursday brings reports on February retail sales, weekly jobless claims, January business inventories and the Congressional hearing on mark-to-market accounting.
Stocks movers: Financial stocks were mostly higher, but off their best levels as investors geared up for the congressional hearing Thursday on mark-to-market accounting.
Critics say the accounting rule has exacerbated losses for the sector by forcing banks to write down bad assets at fire sale prices. Advocates say it provides a clear picture of the assets banks are holding.
JPMorgan Chase (JPM, Fortune 500) CEO Jamie Dimon said he sees modest signs of an economic recovery and that he supports a plan to create a U.S. risk regulator. Shares gained 4.6%
Citigroup (C, Fortune 500), Morgan Stanley (MS, Fortune 500) and Goldman Sachs (GS, Fortune 500) all advanced.
Technology stocks rallied, including Apple (AAPL, Fortune 500), Dell (DELL, Fortune 500), eBay (EBAY, Fortune 500) and Google (GOOG, Fortune 500).
Dow component Hewlett-Packard (HPQ, Fortune 500) surged 5.8% on a UBS upgrade, Reuters reported.
Market breadth was positive. On the New York Stock Exchange, winners topped losers three to two on volume of 1.75 billion shares. On the Nasdaq, advancers topped decliners by a narrow margin on volume of 2.24 billion shares.
Economy: The February budget deficit increased by $192.8 billion in February, the government reported, short of forecasts for a rise of $205 billion, according to Briefing.com estimates. The deficit for the first five months of fiscal 2009 rose to a record $764.5 billion, over $300 billion more than the entire deficit for fiscal 2008, which was a record. The deficit has been rising because of lower tax revenue and higher government spending on the bank bailout plan.
Four states' jobless rates jumped more than 10% in January, the government said Wednesday. The states were Michigan, South Carolina, Rhode Island and California. In January, 49 states and the District of Columbia saw higher month-over-month jobless rates. Only Louisiana bucked the trend.
Treasury Secretary Timothy Geithner, speaking ahead of the G-20 financial summit next month, urged global leaders to increase their efforts to help the world economy amid a deepening recession.
Bonds: Treasury prices inched lower, raising the yield on the benchmark 10-year note to 3.02% from 3% Tuesday. Treasury prices and yields move in opposite directions.
Lending rates were unchanged. The 3-month Libor rate held steady at 1.33%, while the overnight Libor rate held at 0.33%, according to Bloomberg.com. Libor is a bank-to-bank lending rate.
Other markets: In global trading, Asian markets rallied and European markets gained in afternoon trading.
In currency trading, the dollar fell versus the euro and the yen.
U.S. light crude oil for April delivery settled down $3.38 to $42.33 a barrel on the New York Mercantile Exchange. Prices dropped after the government's report showed crude supplies rose last week, while Chinese consumption dropped.
COMEX gold for April delivery rose $14.80 to settle at $910.70 an ounce. 
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