Wall Street rallies after wrenching sell-off

Wall Street rallies after wrenching sell-off

NEW YORK, Oct 14: Wall Street staged an explosive comeback on Friday as robust results from high-tech companies and bullish comments from a top Wall Street analyst emboldened investors to snatch up battered stocks.

The market was hit by a bombshell profit warning from home improvement retailer Home Depot on Thursday and turmoil in the Middle East. News that tension overseas has subsided and red-hot oil prices have eased somewhat also helped today's rally.

Late Thursday, three key companies -- networking chip maker PMC-Sierra Inc, Internet infrastructure company Juniper Networks and computer maker Gateway Inc -- reported good results, which analysts said sparked a surge in several related stocks.

"The fact that there's less tension in the Middle East today is `Reason No 1' behind the rally, and then Juniper and Gateway and PMC-Sierra. Those were three nice calls," said Uri Landemans, chief investment officer at AFA Management Partners, which manages about $400 million.

Stronger-than-expected inflation numbers cast an early shadow on stocks. The Labour Department said the Producer Price Index, which measures prices paid to the nation's factories, farms and other producers, rose 0.9 per cent in September after a drop of 0.2 per cent in August. The increase was driven by a 3.7 per cent rise in energy costs. Excluding volatile energy and food prices the PPI was up 0.3 percent.

Gateway Inc. rallied $ 9.48 to $ 53.11 after its profits met analysts' expectations, while Juniper Networks Inc, which posted better-than-expected results as sales jumped more than six fold, rose $28-57/64 to $228-1/2. PMC-Sierra climbed more than 20 percent, up $32 to $190-7/16 after its earnings tripled.