INVESTORS UNDAUNTED BY DOWNTURN

Wall Street started to climb back Tuesday.

The Dow Jones industrial average gained 34.68 points Tuesday, advancing to 5,109.89, earning back more than a third of its losses from Monday, when the Dow dropped more than 100 points.

Monday's 101.52 drop was the biggest in point terms since a 120.31 plunge on Nov. 15, 1991.

A major bounce-back in technology shares prompted the Nasdaq composite index to jump 23.82 points Tuesday, its biggest one-day point gain in more than eight years.

Nasdaq's Tuesday increases almost made up for the Monday drop of 27.92.

"Nasdaq is fueled by a lot of technological stocks," said David Willis, a broker with the Cape Girardeau branch of A.G. Edwards & Sons investment firm of St. Louis. "

Much of the increase in the Dow came following an announcement that the Federal Reserve Board had cut the key short-term lending rate by 0.25 point.

"The Dow had been up and down throughout the morning and into the early afternoon," said Joe Domian of the Cape Girardeau branch of the Edward D. Jones investment firm headquartered in St. Louis.

Just before the 2 p.m. Fed announcement, the Dow was down 13.73 at 5,061.48 points.

Positive response was immediate said Domian. "By 2:30, it was up 20 points."

Declining issues outnumbered advancers by about 5 to 3 on the New York Stock Exchange.

NYSE volume was 478.27 million shares as of 4 p.m., up from Monday's 425.52 million-share session, which was shortened by one hour due to a computer glitch.

The NYSE's composite index rose 2.05 to 325.71 while the Standard & Poor's 500-stock index gained 5.12 to 611.93.

At the American Stock Exchange, the market value index rose 4.17 to 531.61.

Monday's decline and Tuesday's rally both stemmed from rapidly shifting views on the federal budget and interest rates, say market experts.

Willis and Domian agree that happenings on the political scene might have been partially responsible for the Monday downturn.

"We had good movement Friday," said Willis. "But with President Clinton and GOP leaders still trying to find a way to end the latest partial government shutdown and negotiate a way to balance the budget, some investors may have been bothered."

A lot of things all came together to create the scene for a stock market decline -- signs of earnings difficulty, dimming hopes for a tax cut, doom-and-gloom reports on retail sales.

Even with all of these events, investors apparently weren't overly concerned.

If investors were worried, the market would have declined again Tuesday, Domian and Willis said.

"The stock market tends to be soft this time of year," said Domian. "Even with Monday's drop, 1995 has been a super year for the stock market."

Domian feels the Federal Reserve cut will be good.

"I"ve been expecting the short-term cut," he said. "I think it was a good thing to do. The short-term rates have been too high compared to the long-term rates, which are OK."

Domian and Willis expect to see better things for the market between Christmas and the first of the year. Traditionally, Willis points out, the stock market has been good during that period of time 33 of the last 43 years.