US stocks rose on Tuesday as a last-minute surge in technology shares offset a disappointing outlook from United Parcel Service Inc and weaker-than-expected results from manufacturer 3M Co.
Traders said that with 90 minutes left toward the close, investors started buying tech shares, which they see as undervalued following a spate of disappointing earnings from companies such as computer maker Dell Inc.
Another catalyst for the late rally came from AT&T, the largest US phone company, which reported a quarterly profit that exceeded analysts' forecasts. Its shares jumped 4.2 percent and led the gainers in both the Dow and the S&P 500. AT&T also raised its forecast for the full year.
But earlier in the day, the outlook from UPS and the lackluster earnings from 3M had stirred investors' worries about the economy, keeping stocks in negative territory for much of the session.
On Nasdaq, shares of SanDisk Corp shot up 14.7 percent a day after the maker of flash memory products for cellphones and digital cameras reported stronger-than-expected earnings. The stock was also upgraded by Robert W. Baird & Co.
"This is a tech-led rally. There's some sector rotation and some program buying, in particular after" some dissapointing tech news, said Larry Peruzzi, senior equity trader at The Boston Co Asset Management, a Mellon subsidiary.
The Dow Jones industrial average rose 52.66 points, or 0.48 percent, to end at 11,103.71. The Standard & Poor's 500 Index gained 7.97 points, or 0.63 percent, to finish at 1,268.88. The Nasdaq Composite Index climbed 12.06 points, or 0.58 percent, to close at 2,073.90.
AT&T shares rose $1.17 to $28.95 on the New York Stock Exchange SanDisk was No 1 among the most positive influences on the Nasdaq 100. The stock gained $5.91 to $46.11.
After the closing bell, shares of Amazon.com Inc sank 10.2 percent to $30.17 on the Inet electronic brokerage network after the Internet retailer reported a sharp drop in second-quarter net income. In regular trading, Amazon shares fell 2.1 percent to close at $33.59 on Nasdaq.
During the regular session, shares of Texas Instruments Inc, the biggest maker of chips for cellphones, rose 4 percent, or $1.11, to $28.95, a day after the company posted higher quarterly earnings. An index of semiconductor stocks rose 1.1 percent. Leading industrial conglomerate, 3M, gave investors a reason for caution when its quarterly profit missed Wall Street's forecasts. Shares of the company, which makes products ranging from Scotch tape and Post-It notes to optical film, fell 5 percent, or $3.58, to $68.11 and topped the decliners in the Dow.
The Dow Jones Transportation Average, which includes UPS, fell 1.8 percent to 4,488.29, after earlier falling as low as 4,391.48. Transportation stocks are especially sensitive to fluctuations in oil prices.
Trading was active on the NYSE, with about 1.75 billion shares changing hands, above last year's daily average of 1.61 billion, while on Nasdaq, about 1.97 billion shares traded, above last year's daily average of 1.80 billion. Advancing stocks outnumbered declining ones by a ratio of about 2 to 1 on the NYSE and by 3 to 2 on Nasdaq.
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