NEW YORK – Stock prices rebounded in choppy trading Wednesday as investors, while still stymied by the Fed's weak economic outlook, chose to put faith in positive news coming from General Motors and software maker Intuit.
The blue-chip Dow Jones industrial average climbed 102.76 points, or 1.01 percent, to 10,276.90 after dropping in the double digits in early trading. The technology-laced Nasdaq Composite Index also reversed an early decline to gain 28.68 points to close at 1,859.98. The broader Standard & Poor's 500 Index added 8.05 points to 1,165.31.
GM underpinned the Dow with a gain of $1.50 to $57.20. The company said it would meet its forecasts, good news after rival Ford Motor Co. last week warned of weaker profits for the rest of the year and announced up to 5,000 job cuts.
"Any company, but GM in particular, when it says the consumer is still spending, it lends to optimism this economy will keep going," said Thomas Garcia, head of trading at Thornburg Investment Management Co.
Personal and small business finance software maker Intuit posted a quarterly loss that doubled from last year due to a dropoff in highly profitable Internet advertising and marketing fees, but said it would meet financial targets for its new fiscal year. Intuit soared from $6.59 to $36.04.
Meanwhile, semiconductor equipment stocks jumped after an industry group said the three-month average of worldwide bookings in July rose to $764.2 million, up 5 percent from June, suggesting the battered industry may be seeing a turnaround.
Applied Materials Inc. jumped $1.89 to $43.90 and KLA Tencor Corp. rose $2.44 to $48.79.
Semiconductor products maker Semtech Corp. jumped $6.05 to $36.25 after saying its income fell by more than half from a year ago, but forecast sequential sales growth of 3 percent to 5 percent.
Giving both the Dow and the Nasdaq a lift was Intel Corp., the world's dominant chipmaker, whose shares rose 89 cents, or 3.29 percent to end at $27.96.
Volume was light, with 672 million shares changing hands on the New York Stock Exchange. Sixteen stocks rose for 13 that fell on the Big Board.
About 939 million shares traded on Nasdaq, where six stocks fell for every five that rose.
All news was not positive, however. More layoffs reflected sluggish economic conditions. AOL Time Warner Inc. said it would restructure its flagship AOL Internet unit, cutting more than 1,200 jobs, or 7.5 percent of staff at AOL, and take a third-quarter charge of $100 million to $125 million.
AOL's shares dropped 40 cents to $39.50.
The Russell 2000 index, the barometer of smaller company stocks, rose 4.94 to 477.18.
Stocks overseas, which also have suffered from economic slowdowns and weak consumer demand, were mixed Wednesday in response to Tuesday's slide in New York.
Japan's Nikkei stock average finished the day up 1.0 percent. In Europe, France's CAC-40 fell 0.5 percent, Britain's FT-SE 100 slipped 0.4 percent, and Germany's DAX index inched up 0.1 percent.
The Fed's widely anticipated action Tuesday brought its key federal funds rate, a benchmark for short-term rates throughout the country, to 3.5 percent — its lowest level since the spring of 1994. It also hinted it stood ready to trim rates further amid persistent weakness in the economy.
Not long after Tuesday's decision, stocks took a nosedive, tumbling to lows not seen since early April, as investors worried that economic recovery is still a long way off and corporate profits may remain under pressure for a while.
Reuters and the Associated Press contributed to this report.
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