Wall Street rebounds on last day of the quarter

Wall Street resumed its advance Tuesday as investors bought up technology and financial stocks to beef up their portfolios on the last day of the quarter.

Analysts attributed much of the market's gain to large investors loading up on rising stocks in order to report strong holdings at the end of the first three-month reporting period of 2009, which ends on Tuesday.

Investors shrugged off lackluster economic data and snatched up some of the biggest names in technology and banking including Google Inc., International Business Machines Corp., Bank of America Corp. and Citigroup Inc.

The market is coming off a two-day pullback as stocks took a breather following a three-week rally that brought the Dow Jones industrial average up 21 percent since early March. That forward drive was pushed along by optimism that U.S. banks may be emerging from the worst of a lending crisis. The government finally delivered details of its plans to take failed loans off the books of struggling banks and leaders of several large banks said they did well in January and February.

The advance on Tuesday seems to be supported by "window dressing" buying as large investors not wanting to end the quarter with large amounts of cash loaded up on stocks they think have good prospects.

"Technology, of all the S&P sectors, is the only one that is up on the year," said Craig Peckham, an analyst at Jefferies & Co. "If you're going to try to window dress anywhere on the last day of the quarter, technology is a good place to start."

In light of the market's more upbeat sentiment in recent weeks, investors also are making bets on sectors that are poised to turn around first when the economy improves, including financial service providers, materials and consumer discretionary companies, Peckham said, like Capital One Financial Corp., Alcoa Inc. and Best Buy Co.

In early afternoon trading, the Dow Jones industrial average rose 135.96, or 1.8 percent, to 7,657.98. The Standard & Poor's 500 index gained 14.39, or 1.8 percent, to 801.92, while the technology-heavy Nasdaq composite index rose 35.21, or 2.3 percent, to 1,537.01.

The Russell 2000 index of smaller companies rose 4.60, or 1.1 percent, to 420.57.

Advancing issues outnumbered decliners by nearly 5 to 1 on the New York Stock Exchange, where volume came to 566.1 million shares.

Technology shares got a lift Tuesday after The Walt Disney Co. and Google announced an agreement late Monday that will allow Google's video site YouTube to show short-form videos from Disney's ABC and ESPN networks. Disney shares rose 49 cents, or 2.8 percent, to $18.34, while Google gained $7.21 to $349.90.

Lincoln National Corp. gained about 10 percent, pulling other life insurance stocks up as well, after saying it would pay off a debt coming due soon, assuaging concerns about the company's financial position. (quote: AP)