It's hard to sustain a correction when vast amounts of money keep flowing into the market, but traders tried their best for most of this week.
It almost looked like overvalued Net and technology stocks were finally falling out of favor. Not yet.
Traders used Friday's monthly jobs report from the Department of Labor as an excuse to go bargain-hunting among stocks that got beaten up during the week's market dive. Job growth was a bit stronger than expected, but the unemployment figure held steady, Labor reported.
Traders figured that the numbers weren't strong enough to offset productivity growth, and will not mean much in terms of inflation (and therefore interest rate hikes). Also, oil prices were down, easing inflation fears as well.
As a result, TheStreet.com's Internet Sector index rose 5.7 percent as the Nasdaq surged 4.17 percent to close at 3882.62 for its biggest one-day point gain ever. The Dow continued its rise, gaining 2.39 percent to close at a record 11522.56.
To gauge Friday's renewed optimism, one need only look at Lucent Technologies.
The most widely held U.S. stock actually gained despite the company's announcement after Thursday's close that it will miss profit estimates by a wide margin. Lucent set volume records, with 166 million shares changing hands, and gained $1.88, or 3.62 percent, to close at $53.88. The gain came after a precipitous fall in early trading that took Lucent as low as $50.75. Lucent said earnings for its fiscal first quarter will be from 36 cents to 39 cents, far short of the 54 cents Wall Street analysts expected.
Net stocks seeing huge losses this week bounced back on Friday. Amazon.com gained $4, or 6.1 percent, to close at $69.56. Yahoo gained $39.06, or 10.61 percent, to finish at $407.25. America Online rose $4.13, or 6 percent, to $72.88. CMGI gained $24.75, or 9.9 percent, to finish at $275.
Financial stocks dipped in early trading, partly in response to the strong employment figures, only to rebound later on as traders piled on.
The recovery showed up in the stocks of online brokerages. Ameritrade gained 38 cents to close at $22.19 after trading as low as $21.75. E-Trade, after bottoming out at $26, gained 31 cents on the day to close at $26.69. National Discount Brokers lost 38 cents on the day, closing at $25.19 after hitting a low of $24.50. DLJ Direct also lost ground, falling 25 cents to $13.56 after reaching a low of $13.38.