Stocks Rebound, Led by Tech

Investors snapped up shares in the battered sector, helping equities stage a comeback despite accounting worries over Bristol-Myers

Aided by selective bargain hunting, stocks fought their way back from hefty losses in a roller coaster session on Thursday. Blue-chips finished modestly lower, while technology issues managed to end in the green, as accounting jitters continued to loom over the markets.

The latest in the parade of accounting scandals: drug giant Bristol-Myers (BMY ) is being investigated by U.S. regulators for allegedly inflating sales by $1 billion last year, according to a press report. The company confirmed it has been meeting with U.S. regulators since April concerning a federal probe of its sales practices. Shares of Bristol-Myers closed down more than 4%.

Meanwhile, reporting season for second-quarter earnings continued. Late Wednesday, Yahoo! (YHOO ) posted above-forecast second-quarter earnings -- its first profit after six consecutive quarters of losses. And Eastman Kodak (EK ) on Thursday said its second-quarter earnings would be sharply higher than estimated as restructuring measures pay off sooner than planned, which would offset a drop in sales.

In active, volatile trading, the Dow Jones industrial average was down 11.97 points, or 0.14%, to 8,801.53. At one point in the session, the average was down nearly 200 points. Despite a Wall Street analyst downgrade of Dow component General Motors (GM ) on concerns about pension expenses, the auto manufacturer ended relatively flat. Key Dow losers included 3M (MMM ), Procter & Gamble (PG ), and Home Depot (HD ).

The tech-heavy Nasdaq composite added 28.41 points, or 2.11%, to 1,374.42. Among the gainers were tech leaders like Intel (INTC ) and Cisco Systems (CSCO ). Meanwhile, the Standard & Poor's 500-stock index was up 6.91 points, or 0.75%, to 927.37.

Among other stocks in the news Thursday, discount retailer and Dow component Wal-Mart (WMT ) raised its second-quarter and full-year earnings guidance, citing better-than-expected sales driven by demand for seasonal goods like air conditioners and summer clothes, according to news reports. For the full fiscal year, the discount chain said it now expects earnings per share of $1.76 to $1.78, up from prior guidance of $1.74 to $1.76 per share.

Treasury Market

U.S. Treasuries finished lower, as profit taking and unwinding of safe-haven bids hit Treasuries, amid a rebound in equities.

In economic news, the Labor Department said the Producer Price Index, a key gauge of inflation at the wholesale level, climbed 0.1% in June. Excluding volatile food and energy prices, the so-called core PPI rose 0.2%, the biggest rise since December, 2001, reflecting a gain in wholesale prices for autos, construction machinery and pharmaceuticals.

Plus, the number of initial jobless claims rose by 16,000 to a seasonally adjusted 403,000 for the week ended July 6, the Labor Department said. But the weekly data, a department official said, is typically volatile this time of year and hard to seasonally adjust as auto manufacturers and others begin annual summer shutdowns at their plants, according to news reports.

World Markets

Taking a cue from continued weakness in U.S. equities, European markets closed with losses. In London, the Financial Times-Stock Exchange 100 index tumbled 190.10 points, or 4.30%, to 4,230. In France, the CAC 40 was off 144.28 points, or 3.95%, to 3,512.10. And in Germany, the DAX Index lost 71.72 points, or 1.71%, to 4,118.50. In economic news, German consumer prices fell 0.1% in June, putting them up 0.8% year over year.

In Asia, the markets finished sharply lower. The Nikkei plunged 266.92 points, or 2.48%, to 10,485.74. In Hong Kong, the market tumbled 228.73 points, or 2.12%, to 10,558.81.

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