If Tuesday's trading is any indication, investors obviously aren't ready to call off the greatest bull market in history.
The New York Stock Exchange and NASDAQ set trading records in volume Tuesday as bargain-hunting investors pushed the Dow up 337.17 points, or 4.7 percent -- the largest single-day gain in its history. The NASDAQ composite rose 65.25 points to 1600.34.
The rally helped both markets recover half their losses following Monday's crash.
Keying the rally in the Dow was International Business Machines, which announced a $3.5 billion buy-back plan of its shares. IBM gained $9.38 per share to $99.38. Late in the day, IBM indicated that it may buy back another $3.5 billion worth of shares, market conditions permitting.
Intel also helped pushed the NASDAQ composite into the black, as its shares rose $10.75 to $85.50 per share in very heavy volume. Intel reported 12- to 24-percent price cuts in Pentium chip prices and a settlement of its legal problems with Digital Electronics -- good news that was lost in the shuffle during Monday's market crisis.
Compaq shares soared $6.63 per share to $67.13 in heavy trading. Other winners included Dell Computer, up $8.06 to $89.94; and 3Com Corp., up $1.94 to $44.81.
WorldCom gained $1 per share to $32 as investors re-evaluated the soundness of WorldCom's bid for MCI in the wake of Monday's market woes. MCI was off 19 cents per share to $34.19.
From all indications, the markets were expected to resume their precipitous decline today, on the heels of bad overnight market news from Asia and weakness in the S&P futures index.
The Hong Kong Hang Seng index and the Tokyo Nikkei 225 stock average both fell nearly twice as much as their Monday slides: the Hang Seng was down 13.7 percent and the Nikkei fell 4.3 percent at the close of trading in Asia on Tuesday. European markets were also down severely.
However, a rally in stock futures at mid-morning -- fueled by investors who liked the favorable economic conditions underpinning U.S. markets -- combined with the good news on tech stocks to establish enough forward momentum for a sustained rally.
Networking stocks made a robust rally as Cisco Systems Inc. shot up $7.50 per share to $80.38. Bay Networks was up $3.25 per share to $31.25, while Ascend Communications picked up 6 cents per share to $29.44.
Internet search engine stocks continued their roller coaster ride as Yahoo! Inc. surged up $5.88 per share to $43.88 after losing $9.56 per share Monday. Lycos Inc. lost $6.94 per share Monday, but managed to recoup $3.25 per share. Excite Inc. was up $3.31 per share to $25.81.
Applied Materials Inc. gained $2.75 per share to $33.75, while Sun Microsystems Inc. and Apple Computer Inc. shares rose $1.94 per share and 94 cents per share, respectively. Texas Instruments rose $9.25 per share to $112.