Late Rebound Pushes Stocks Back Near Record

A late rebound pushed stocks back toward record levels on Wednesday as investors shrugged off a spate of warnings about technology sector profits.

The Dow Jones industrial average rose 13.18 to 8,032.01 after erasing a 57-point deficit.

Broad-market indicators also rebounded over the final two hours, leaving some within striking distance of record highs set a few weeks before late October’s selloff. Even with Monday’s 190-point rally, however, the Dow remains about 227 points shy of its Aug. 6 peak of 8,259.31.

Surprisingly, the technology-laden Nasdaq composite index managed to post one of the day’s biggest gains despite a sudden stream of discouraging profit forecasts capped by 3Com’s warning late Tuesday. Several leading technology shares ended the day higher, and even 3Com recovered from a steep loss, falling just 1/8 to 34 15/16.

Helping cushion the decline in stocks was a strong day in the bond market, where the yield on the 30-year Treasury nearly grazed 6 percent for the first time since early 1996.

Analysts said bond traders were relieved by the non-threatening tone of the latest economic data and a speech by Federal Reserve Chairman Alan Greenspan.

Greenspan, steering clear of his usual fixation with inflationary pressures, devoted most of Tuesday night’s comments to the financial crisis in Asia, suggesting that the turmoil will give way to renewed prosperity if governments swiftly reform the region’s shaky banking systems.

Some of the stocks that moved substantially or traded heavily Wednesday:

NYSE

Merck, up 3-3/8 at 98.

The drug maker’s chief executive, Raymond Gilmartin, told analysts he is comfortable with their 1998 earnings projections. Merck is based in Whitehouse Station, N.J.

NASDAQ

3Com, down 3/8 at 34-15/16.

National Semiconductor (NYSE), down 1-9/16 at 30-3/4.

Numerous analysts downgraded 3Com after the maker of modems and networking equipment warned late Tuesday that it would only post a slight profit for its second quarter due to efforts to cut inventory. National Semiconductor, a 3Com supplier, was downgraded as well. Both companies are based in Santa Clara, Calif.

Anchor Gaming, down 11-3/4 at 64-1/4.

The Wall Street Journal reported that Anchor’s CEO, his family and four company executives had dramatically reduced their stakes in the Las Vegas slot-machine specialist.

AMEX

Trex Medical, up 1-1/8 at 14-15/16.

Lehman Brothers upgraded the maker of mammography equipment’s shares to “buy” from “outperform.”