NEW YORK – Stocks managed to remain in positive territory at the end of a volatile session Monday as nervous investors tried to shake off their fears and looked for bargains.
"Short-term investors are worried about the market selling off, but long-term investors are starting to see some opportunities that are being created,'' said John Forelli, senior vice president at Independence Investment LLC, which manages $25 billion.
"Investors are grappling with how much is factored into the market,'' he added. ``We are sort of tip-toeing around and trying to figure out whether a bottom has been reached.''
The Dow Jones industrial average were virtually unchanged, slipping a mere 0.34 point to end at 9,605.51 after a see-saw session during which it dropped more than 1 percent at the open, then gained as many as 60 points.
The technology-dominated Nasdaq Composite Index gained 7.70 points, or 0.46 percent, at 1,695.40. The Nasdaq has risen only twice in the last 10 trading sessions.
The Nasdaq was led higher by recently battered big names such as software giant Oracle Crop., up 39 cents at $11.46.
``Some stocks look cheap after last week's downdraft,'' said Hugh Johnson, chief investment officer at First Albany Corp. ''But it's only one day and it certainly doesn't mean the trend is positive. It's a bounce from an oversold level. We still have lots of hurdles ahead of us.''
Year to date, the Nasdaq is down 31.4 percent, the S&P 500 is down 17.25 percent and the Dow is off 10.95 percent.
The Standard & Poor's 500 index climbed 6.78 points, or 0.62 percent, to 1,092.56. On Friday, the S&P, against which the performance of money managers is judged, dropped below its April low and closed at a level unseen since late October 1998 after a surge in the U.S. unemployment rate spooked Wall Street.
Some $5.4 trillion in investor wealth has been wiped out in this nasty bear market so far, based on the 31.7 percent decline in the very broad Wilshire 5000 index, which includes almost all U.S. stocks, since its closing peak at 14,751.64 on March 24, 2000, through Friday's close of 10,066.49. Year to date, $4.2 trillion in wealth has disappeared.
Investors here are now bracing for the ``preannouncement season,'' when companies warn quarterly results may land shy of analysts' estimates. Wall Street hopes earnings will emerge from their slump in the first quarter of next year, but few view that as a sure thing amid an economic malaise that has lasted longer and been more severe than many anticipated.
Investors will pick apart a slew of economic reports for clues on when the world's largest economy might start springing back from its sluggishness, with focus on the government's report on Friday on August producer prices.
Also expected on Friday are August retail sales, industrial production and capacity utilization, and consumer sentiment.
RF Micro Devices Inc. offered a bright outlook and rose 42 cents to $22.73, but it was way off session highs. The company, which makes radio frequency products used in mobile phones, expects to hit break-even in its second quarter on sharply higher revenues. Previously, it forecast a loss.
Qualcomm Inc. added $1.36 to $50.54. Credit Suisse First Boston raised its rating on Qualcomm after the wireless technology company's customers announced equipment upgrades.
Qwest Communications International Inc. cut its financial outlook through 2002 and will cut 4,000 jobs and trim its capital spending. Shares of the voice and data services company fell initially to multi-year lows at $16.29 but later recovered, posting a gain of $1.76 to end at $19.90, or 9.7 percent. It was the most active on the Big Board.
On a dour note, Avici Systems Inc., a maker of routers that move data across fiber-optic networks, fell more than 28 percent after warning it would post a larger-than-expected loss and would cut 14 percent of its work force. Avici was off 79 cents at $1.99 on the Nasdaq.
Out of 662 corporate pre-announcements so far in the third quarter, 405 have been negative, says the market tracking firm Thomson Financial/First Call. Although the tone remains bleak overall, the pace of negative surprises is a little slower than at the same point in the first and second quarters, when 468 and 459 negative revisions were issued.
AOL Time Warner Inc. added $2.13 to $34.41. The media giant offered to merge AT&T Corp.'s cable television business with its own cable and programming business, The Wall Street Journal reported. AT&T, a Dow component, shed 5 cents to $17.65.
Dominion Resources Inc. fell $2.37 to $60.26 after agreeing to buy Louis Dreyfus Natural Gas Corp. for $1.8 billion to expand its natural gas reserves and energy business. Louis Dreyfus rose $5.72 to $38.68, or more than 17 percent.
Federal Reserve Bank of Philadelphia President Anthony Santomero said that U.S. economic data was in the early stages of turning from all negative to mixed and many of the Fed's interest-rate cuts of this year had yet to have an impact.
But market sentiment was dampened somewhat by a Fed report that showed consumers basically put the brakes on adding any more debt in July, as the level of consumer credit outstanding unexpectedly held steady after a drop in June.
The numbers are more significant as they follow hard on the heels of a report on Friday that showed the unemployment rate shot up to a four-year high, raising fears that consumer spending, which accounts for two-thirds of the U.S. economy, would slow.
``The question with consumer credit is: 'Is the customer cutting back?' What's been keeping the economy away from recession is the consumer,'' said Richard Babson, president of Babson-United Investment Advisors, which manages $1.8 billion.
Declining issues led advancers nearly 2 to 1 on the New York Stock Exchange. Volume came to 1.24 billion shares, compared with 1.43 billion Friday.
The Russell 2000 index fell 4.46 to 440.73.
Asian stocks slipped Monday, wallowing in Wall Street's gloom after the U.S. employment report. Tokyo stocks slumped to a new 17-year closing low as worries over earnings spread from technology stocks to the broader market. Banks mainly led the Nikkei's 3.05 percent slide to 10,195.69, a level not seen since August 1984.
European stocks plunged too, but recovered to end well above their lows. Germany's DAX index slipped 1.3 percent, while France's CAC-40 and London's FT-SE 100 each dropped 0.7 percent.
Reuters and the Associated Press contributed to this report.