Indexes Hurt by Fears but Recover From Lows

Stocks ended mostly in the red Wednesday, hurt in part by renewed terrorism fears. But some analysts saw positive signs in the market’s ability to rally from its intraday lows, and in the strength shown by semiconductor stocks.

In other trading, energy shares slumped on a report showing rising U.S. crude inventories. Bond yields inched up.

On Wall Street, the Dow Jones industrial average closed at a three-month low, off 15.41 points, or 0.2%, at 10,048.23. It was the blue-chip index’s fifth straight decline.

The Standard & Poor’s 500 index eased 2.62 points, or 0.2%, to 1,091.33, also the fifth loss in a row. The technology-heavy Nasdaq composite index managed to post a gain, adding 7.68 points, or 0.4%, to 1,909.48.

Losers topped winners by 9 to 5 on the New York Stock Exchange and by 6 to 5 on Nasdaq.

But market bulls were encouraged because key indexes bounced from their worst levels, which were reached early in the day on news that French police found a bomb on the Paris-to-Basel rail line.

The Dow fell as low as 10,007, then rebounded. A later sell-off also was halted as more buyers jumped in near the end of trading.

“I think the market is trying to price in terrorism right now,” said Brian Williamson, an equity trader at Boston Co. Asset Management.

A rally in semiconductor-related stocks also helped to buoy sentiment. The SOX index of 18 chip stocks jumped 2.3% to 468.14. It had fallen 18.4% from Jan. 13 through Tuesday.

At the annual meeting of Applied Materials, a major producer of semiconductor manufacturing equipment, Chief Financial Officer Joseph Bronson said the industry’s rebound “is in the early stages, not the later stages,” Reuters reported.

Applied’s shares rose 41 cents to $20.77. Among other chip stocks, Advanced Micro Devices jumped 68 cents to $15.54, National Semiconductor gained $1.29 to $40.36, and Xilinx was up $1.05 to $36.30.

Many investors are counting on strong first-quarter corporate earnings reports to lift the market in April. “I think when we get that slew of economic data next week and some earnings, then the market will react in a more positive way,” said Peter Cardillo, strategist at S.W. Bach & Co.

Lower energy prices also could help, analysts say. On Wednesday, near-term crude oil futures dipped 44 cents to $37.01 a barrel in New York after the government said that U.S. crude inventories rose for a fourth straight week, to the highest level since November. That damped recent concerns about tight oil supplies.

Oil hit a 13-year high of $38.18 a barrel last week.

In the Treasury bond market yields were modestly higher after the government sold $26 billion of two-year notes at a yield of 1.52%. Traders said foreign demand for the notes was on par with auctions in recent months.

In currency trading, the euro tumbled to a three-month low of $1.213 from $1.232 on Tuesday, hurt by the rail bomb report.

Among the day’s highlights:

* Gaming stocks attracted buyers after Ameristar Casinos boosted its first-quarter earnings outlook. Ameristar jumped $1.92 to $30.50, MGM Mirage rose $1.27 to $44.81, and International Game Technology surged $2.71 to $44.17.

* In the tech sector, Novell jumped $1.17 to $10.63 on an upbeat brokerage report.

* Energy stocks pulled back with crude prices. Exxon Mobil lost 66 cents to $40.10, Unocal slid 86 cents to $36, and Anadarko Petroleum fell $1.55 to $50.79.

* Ameron, a Pasadena-based maker of water pipes and other infrastructure-related products, slid $4.29 to $34.56 after reporting a first-quarter loss.

Market Roundup, C6