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7/8/2004

Stocks climb on bargain hunting

The Associated Press

NEW YORK — Wall Street reversed a three-day slide Wednesday as investors returned to the market in search of bargains, shrugging off high-tech profit warnings and an analyst downgrade of Internet stocks.
The advance had little conviction behind it, however, as volume remained light and the major indexes lost more than half of their earlier gains. Investors were generally making few big moves as they awaited second-quarter earnings, including results from Yahoo! Inc. and Alcoa Inc. that were released after the close.
But analysts said investors were making some bets on hopes for strong second-quarter results overall. A slight drop in oil prices also cheered the market.
The Dow Jones industrial average rose 20.95, or 0.2 percent, to 10,240.29.
Broader stock indicators were narrowly higher. The Standard & Poor’s 500 index gained 2.12, or 0.2 percent, to 1,118.33, and the tech-dominated Nasdaq composite index was up 2.65, or 0.1 percent, at 1,966.08.
All three major indexes had been down for the three previous sessions as investors worried that the economy was slowing.
But despite the current negativity and warnings, some analysts believed a strong second quarter earnings season was still a given, in part due to the lower comparisons from a year ago, when companies were just starting to see their bottom lines recover from recession.
Prudential Securities downgraded the entire Internet sector to “neutral” from “favorable,” citing the possibility of a summer slowdown.