NEW YORK (CNN/Money) - A modest rise in chip and automotive stocks pushed major markets higher Tuesday, even amid reports of new terrorism threats on the eve of the one-year anniversary of the Sept. 11 attacks.

The Nasdaq composite index added 15.49, or 1.19 percent, to 1,320.09. The Dow Jones industrial average rose 83.23, or 0.98 percent, to close at 8,602.61. The Standard & Poor's 500 index gained 6.62, or 0.73 percent, to end the day at 909.58.

"Today's market was almost a mirror image of yesterday, with both starting out weak and turning it around by the close. ...There's not a lot of volume, but up is better than down," Ted Weisberg, a trader at Seaport Securities, told CNNfn's Street Sweep.

As for Wednesday's trade: "We'll be open, but we'll open later, and certainly for a lot of people it's going to be very emotional." In terms of the trading itself: "I wouldn't want to call up or down," Weisberg said, "but I would guess it's going to be a lot like today."

Trading Wednesday is expected to be light on the anniversary of the worst terrorist attack on U.S. soil. Equity markets will delay opening by 90 minutes to allow traders and other market participants to attend memorial observances.

In the early afternoon, news surfaced that the Bush administration has raised the terror alert level to "orange," signifying high risk, from "yellow," signifying elevated risk, due to intelligence information received during the past 24 hours.

Stocks initially abandoned an earlier chip- and automaker-led rally, following the reports, but managed to digest the news and resume an advance by the close.

"There are going to be amped-up threats surrounding this anniversary, but the market took this one in stride and will continue to take any additional alerts in stride," said Matt Ruane, head of listed trading at Gerard Klauer Mattison. "For the market to sell off sharply on this would be un-American."

In corporate news, German automaker DaimlerChrysler (DCX: up $1.76 to $43.01, Research, Estimates) reiterated that 2002 operating profit at its trucks unit would come in higher than the previous year's level, despite the tough market conditions. The company also said that restructuring at the U.S. Freightliner arm, which hurt results last year, was moving ahead of plan.

No. 2 automaker Ford Motor (F: up $0.10 to $10.90, Research, Estimates) said late Monday that it expects to post a small profit in the current quarter and in 2002, due to progress on its revitalization plan. Analysts had been expecting a loss of 10 cents per share for the current quarter and a profit of 29 cents for 2002. After the news, UBS Warburg raised its 2002 earnings-per-share estimate to 40 cents from 15 cents, but maintained its "reduce" rating and warned that even with the push, earnings are very depressed.

Helping the Dow industrials, diversified manufacturer United Technologies (UTX: up $2.08 to $61.21, Research, Estimates) reaffirmed its 2002 guidance for a profit of $4.40 per share, which is a penny a share better than what analysts have been expecting.

Hewlett-Packard (HPQ: up $0.66 to $14.16, Research, Estimates), Exxon Mobil (XOM: up $0.79 to $34.79, Research, Estimates), AT&T (T: up $0.35 to $12.65, Research, Estimates) and Wal-Mart Stores (WMT: up $1.50 to $54.78, Research, Estimates) were among other Dow gainers.

Tech stocks clung to gains spurred on by a modest recovery in semiconductors, which led hardware, software and other sectors higher.

"The semiconductors are lifting on very dismal volume, with very few people acting before the anniversary," added Gerard Klauer Mattison's Ruane. "It's a continuation of yesterday, and clearly there is a little money going into semis, but it's going to be a long, long time before there is any real growth in the sector."

Chip-equipment makers were among the biggest advancers, with Applied Materials (AMAT: up $0.78 to $13.47, Research, Estimates), KLA-Tencor (KLAC: up $1.46 to $33.55, Research, Estimates) and Novellus Systems (NVLS: up $1.22 to $24.88, Research, Estimates) all gaining.

Shares of Intel (INTC: up $0.39 to $16.47, Research, Estimates) rose despite some lukewarm comments late Monday. The No. 1 chipmaker's president and chief operating officer said that it was too early to predict the year-end holiday personal computer demand and that there is no sign yet of a recovery in U.S. PC sales.

"These stocks have been bouncing all over the place. Right now, they are bouncing up," said Fred L. Wolf, a semiconductor-equipment analyst at Adams Harkness & Hill. "Today (Tuesday), they may be focusing on the positive aspects of Nokia's forecast, but there isn't anything fundamental that's helping them, and they don't have much direction."

Mobile handset maker Nokia (NOK: down $0.31 to $13.87, Research, Estimates) lowered its third-quarter sales targets, citing continued weakness at its network equipment unit amid poor market demand. However, tempering the negativity, the company said it expects to reach its third-quarter earnings targets and that sales of mobile phones in the quarter should grow from the same period one year earlier by 4 percent to 9 percent. Shares of the stock declined, taking Ericsson (ERICY: down $0.05 to $0.63, Research, Estimates) and other sector mates down with it.

In addition, Genentech (DNA: down $3.11 to $28.89, Research, Estimates) fell sharply after the biotech said late Monday that a late stage study of its experimental Avastin drug, which is used to treat breast cancer, showed disappointing results. Following the news, Salomon Smith Barney downgraded the stock to "in line" from "outperform," and Prudential cut its stock price target to $25 from $30.

Also key to market activity are remarks from two key government figures expected Thursday: President Bush's pitch to the United Nations for global action against Iraqi President Saddam Hussein, and Federal Reserve Chairman Alan Greenspan's testimony on the state of the economy before the House Budget Committee.

"Many people will be here tomorrow, but the action is going to be more like a holiday," said Bryan Piskorowski, market analyst at Prudential Financial. "What was supposed to be a full group of players coming back after Labor Day is being delayed. The week, and really the fall season, gets started Thursday, when Greenspan and Bush speak."

European markets closed higher, and Asian-Pacific stocks finished mostly higher Tuesday.

Treasury prices rose, pushing the 10-year note yield down to 4.00 percent. The dollar rallied sharply versus the yen and was a little stronger versus the euro.

Light oil futures finished unchanged at $29.73 a barrel, while gold and silver declined.

Market breadth was positive. On the New York Stock Exchange, advancers edged decliners 9-to-7 as 1.14 billion shares changed hands. On the Nasdaq, advancers edged decliners as 1.42 billion shares traded.