Stocks climb, not slide, in last hour

NEW YORK -- This time, the stock market had a late-day rally.

Most stocks surged in the final hour of trading Tuesday to give the Dow Jones industrials a gain of 123 points. That ended a two-day slump that sent the Dow down nearly 440 to a seven-month low.

The market had a choppy rebound although Federal Reserve chairman Ben Bernanke set the tone for the day by saying he didn't expect the economy to go back into recession. The Standard & Poor's 500 index rose, but the Nasdaq composite index slipped as computer chip manufacturers fell on downbeat analyst comments.

Like the last two days, most of the action was in the last hour. Tuesday, however, it was buying that accelerated. The Dow was up only about 16 points shortly after 3 p.m., then rose 107 points in the final 43 minutes of trading.

Like Monday, there was no one catalyst for the late move. But the late rally itself drew buyers who had waited to see whether stocks would have another late-day slide. And computer programs also kicked in, with rising stocks triggering more buying -- the reverse of the computer selling seen the last two days.

Materials stocks rose after gold extended its gain, briefly touching a new record high of $1,254.50. Chemical maker DuPont climbed 4.1 percent. Meanwhile, oil drilling companies slumped after President Barack Obama blasted the industry in an interview with NBC. Transocean, which owns the oil rig that exploded in the Gulf of Mexico and caused the still-spreading spill, fell 5.8 percent.

Uri Landesman, president of Platinum Partners in New York, said traders could go back to selling if more doubts arise about the recovery.

"People's tolerance for bad news is low," he said. "There is a reasonably high chance of bad headlines."

According to preliminary calculations, the Dow rose 123.49, or 1.3 percent, to 9,939.98. The Dow had fallen 4.3 percent in the two prior days to its lowest level since Nov. 4.

The S&P 500 index rose 11.53, or 1.1 percent, to 1,062.00. It also fell Monday to its lowest close since November. The S&P's two-day slide of 5.4 percent was its steepest since March 2009.

The Nasdaq fell 3.33, or 0.2 percent, to 2,170.57.