Blue-chip stocks climbed Thursday, recovering in late trading as buyers ventured back into the market after a steep sell-off on a spate of profit warnings. Sentiment remained very fragile, however.

Investors flocked to health and industrial shares, betting these sectors are the best positioned to weather a likely recession. Oil stocks also jumped as oil prices rose. But tech stocks failed to benefit from the rally.

The Dow Jones industrial average rose 114.03 points, or 1.33 percent, to 8,681.42. So-called "defensive'' stocks pushed the index up on to higher ground. Drug company Merck & Co. and Minnesota Mining & Manufacturing, also known as 3M, contributed 40 points to the Dow's gain, while Exxon Mobil Corp.  added another 17 points.

The technology-dominated Nasdaq Composite Index shed 3.33 points, or 0.23 percent, to 1,460.71. Earlier, the Nasdaq was down more than 3 percent, and the Dow was off more than 1 percent.

The broader Standard & Poor's 500 Index rose 11.57 points, or 1.15 percent, to 1,018.61, boosted by oil stocks.

"In times of uncertainty, investors look to stay with the companies with strong balance sheets and reduce some of those stocks that don't have strong balance sheets,'' said Peter Cooke, portfolio manager with Glenmede Trust Co., which oversees $16 billion. "There's a fair amount of risk in technology stocks. They're down a lot, but their valuations were extraordinary.'' 

Blue chips, which were pinned lower for most of the session, surged in the last two hours of trading, and even tech issues scrambled back from a 3 percent loss. 

Despite the Jewish Yom Kippur Day of Atonement holiday, trading was active on the Big Board, with almost 1.5 billion shares changing hands. More than three stocks rose for nearly every two that fell on the New York Stock Exchange. On the Nasdaq, more than 2 billion shares traded, and 18 fell for every 17 that rose. 

The Dow average suffered its biggest weekly drop since the Great Depression last week on uncertainty over possible military retaliation for the Sept. 11 attacks on the World Trade Center and the Pentagon, which left almost 7,000 missing or dead. 

Investors also have been worried about the outlook for corporate profits amid tremendous expenses following the attacks. Companies in the S&P 500 are now forecast to say profits will fall in the first quarter of 2002, rather than the gain expected earlier, said market research firm Thomson Financial/First Call. 

"For the market to make a sustained move, we need to get some real earnings numbers out to figure what next year looks like. But my sense is that we have way overshot on the downside,'' said Patrick Adams, president of Choice Funds in Colorado, which manages $150 million. 

Bulls also point to the Federal Reserve's eight interest-rate cuts so far this year, saying the cuts will soon help economic growth tick up. 

Health-care stocks rose, including Merck, which gained $2.86 to $66.21. Industrial firm 3M advanced $2.93 to $96.31. 

Tech stocks tumbled after analysts cut estimates. 

Cisco Systems Inc. shed 99 cents to $11.24 and was the most-active stock on the Nasdaq after Morgan Stanley cut its 2002 earnings forecast for the networking giant by 21 percent, citing weakness in China. 

Meanwhile, Goldman Sachs lowered earnings forecasts for semiconductor companies, including Analog Devices Inc., which fell 80 cents to $32.05. 

Among the day's big movers, network equipment maker Sonus Networks Inc. fell $3.52 to $2.88 after warning it will post a loss in the current quarter, due to the telecommunications market's deepening slump. 

Oil stocks rose after the Organization of Petroleum Exporting Countries refrained from making big cuts to crude production. Exxon Mobil rose $2.41 to $38.42. 

Amid big merger news, Reliant Resources Inc. said it will acquire Orion Power Holdings Inc. for about $2.9 billion in cash in order to expand its presence in the fast-growing U.S. independent power production industry. 

Orion shares jumped 30.52 percent, rising $5.86 to $25.06, while Reliant stock shed 93 cents to end at $15.75, down 5.58 percent. 

Still, uncertainty over the timing and extent of likely U.S. military reprisal for the attacks on New York and the Washington area will continue to weigh, money managers said. 

"Markets don't like uncertainty and no one has any idea what's going to happen -- we don't even know if we'll go into a full-scale war,'' said Dan McMahon, head of block trading for CIBC World Markets. 

Economic news remained gloomy.

First-time jobless claims in the latest week surged to 450,000, their highest level in more than nine years, as job losses in the New York area jumped in the aftermath of the attack that destroyed the Trade Center and shut down stock markets for the longest stretch since the Great Depression.

The Russell 2000 index, the barometer of smaller company stocks, fell 4.61 to 385.18.

Overseas markets were higher Thursday. Japan's Nikkei stock average ended the day up 0.6 percent. France's CAC-40 finished with a gain of nearly 1.0 percent, while Britain's FT-SE 100 rose 1.4 percent. In late trading, Germany's DAX index was up 1.6 percent.

Reuters and the Associated Press contributed to this report.