NEW YORK -- A rebound in technology stocks set off a strong rally on Wall Street Tuesday, lifting the Dow Jones industrials more than 250 points to their first close above 10,000 in nearly a month.
But analysts remained cautious, noting that the market remains highly vulnerable to more declines as first-quarter earnings reports begin.
"The bear market is still in force. This rally is a good and an important sign that maybe we're starting to bottom, but there's no evidence we've bottomed yet," said Bob Streed, portfolio manager of Northern Select Equity Fund.
The blue chips rose 257.59, or 2.6 percent, to 10,102.74, their first close above 10,000 since March 15. At one point during the session, the Dow Jones industrial average was up more than 310 points.
The Nasdaq Composite Index also had a big day, rising 106.32, or 6.1 percent, to 1,852.03. And the market's broadest measure, the Standard and Poor's 500, gained 30.79, or 2.7 percent, to 1,168.38.
Enthusiasm for technology stocks led the rally. Microsoft (MSFT) rose $2.53 to $59.68, while Intel (INTC), which was downgraded by two investment firms Monday, jumped $1.55 to $24.75, more than recovering from the previous session's 43-cent loss.
Non-technology issues were also strong. J.P. Morgan rose (JPM) $2.88 to $43.30, a 7.3 percent gain and 3M gained $3.99 to $108.57.
There were some exceptions. Aetna (AET) plunged $6.35 to $29.80, nearly an 18 percent loss, after the health insurance provider warned its results would fall below expectations because of increasing costs.
And consumer product companies lagged as investors shifted their focus to technology. Procter & Gamble (PG) fell $1.64 to $58.70.
Wall Street has alternately rallied and then fallen back in recent days, leaving many analysts skeptical about the durability of the market's advances. The Dow had fallen below 10,000 last month amid investors' deepening pessimism about the economy and its effect on earnings.
With first-quarter earnings reports just starting and mixed signals about the health of consumer confidence and corporate profits, many analysts say it's too soon to tell if stocks are recovering or merely staging bear market rallies.
"I think we need a little more time. We need some good earnings, we need the negative news to kind of back off," said Robert Harrington, head of equity trading at UBS Warburg.
Market watchers also say investors who have sustained heavy losses remain a source of pressure on the market.
"There are lots of people who would love to sell some of their stocks at higher prices, which is why these rallies have failed in the past," Streed, the Northern Select portfolio manager, said.
Advancing issues led decliners more than 2 to 1 on the New York Stock Exchange. Volume came to 1.34 billion shares, compared with 990.58 million at the same point Monday.
The Russell 2000 index was up 10.17 at 451.84.
Overseas, Japan's Nikkei stock average slid 1.7 percent. European stocks fared better. Germany's DAX index climbed 2.3 percent, Britain's FT-SE 100 gained 2.5 percent, and France's CAC-40 rose 2.9 percent.
