NEW YORK -- Technology and blue chip stocks advanced Tuesday on a late-round of bargain hunting by investors seeking to capitalize on the carnage of Wall Street's worst day this year.
But analysts cautioned against reading too much into the gains, noting they barely cut into the significant losses of Monday's tumultuous session. The Nasdaq composite index hovered at the 2,000 benchmark, rebounding slightly from its lowest level in two years.
"It doesn't seem like the market has a lot of conviction," said Todd Clark, co-head of trading at WR Hambrecht.
In heavier-than-usual afternoon trading, the Nasdaq Composite Index was up 77.91 at 2,001.29, a day after falling 6.3 percent.
The Dow Jones industrial average rose 69.04 to 10,277.29 in choppy trading, recovering only some of 436 points it lost Monday in its fifth-worst point drop on record. The Standard and Poor's 500 rose 14.38 to 1,194.54, remaining in bear market territory at more than 20 percent off its high.
Analysts said the rebound was likely temporary, because the outlook for company profits remains dismal and investor sentiment is still fragile.
"We've gotten down far enough that there is going to be some bargain-hunting like what we're seeing today," said Richard Dickson, technical analyst at Scott & Stringfellow. "But I don't think we've put the low on the market yet. We're clearly still correcting the excesses in some of the tech stocks."
The market's skittishness wasn't helped by a Commerce Department report Tuesday showing sales at the nation's retailers fell by 0.2 percent in February, the first drop in three months. The weakness was led by a sharp decrease in sales at furniture and home furnishing stores and at bars and restaurants.
Meanwhile, Motorola (MOT) said it was cutting 7,000 more positions, in addition to 5,000 previously announced. The world's second-largest cell-phone manufacturer, which blamed soft market conditions, rose 13 cents to $15.09.
The disappointing earnings news and weak economic data isn't likely to stop anytime soon. Still, investors showed interested in some stocks in the battered tech sector.
Cisco Systems (CSCO) was up $2.06 to $20.88, while Intel rose $1.38 to $29.13 and Microsoft (MSFT) gained $2.56 to $54.50. Intel (INTC) and Microsoft are Dow components.
Wall Street also showed interest in financial stocks, sending J.P. Morgan (JPM) up $1.93 to $47.42.
But other stocks didn't fare as well, especially those in areas usually attractive to investors in uncertain economic times. The Dow's gains were limited by Merck (MRK), which slipped $1.72 to $72.43 and Coca-Cola (COKE), which lost $1.46 to $48.46.
Many analysts have said they expect stocks to continue to be weak for at least the next several months, in part because of dismal earnings news. The Federal Reserve is expected to lower interest rates for a third time this year when it meets Tuesday, but most market watchers expect it to provide little spark for equities. believing that stock prices already factored in the effects of such a cut.
"A lot of people had thought the Fed was going to be more aggressive, but it hasn't been. People are going to be watching that meeting carefully," Clark said.
Declining issues led advancers nearly 2 to 1 on the New York Stock Exchange. Volume came to 1.06 billion, compared with 930.99 million at the same point Monday.
The Russell 2000 index dropped 0.29 to 458.11.
