Techs Lead Stocks Higher; Oil Recedes

Stocks held onto modest gains as a better-than-expected report on manufacturing and wave of deal news gave traders cause for optimism.

Select buying in tech stocks, as investors increased their appetite for risk, led the way. Hewlett-Packard and Intel were among the top gainers on the Dow Jones Industrial Average, along with General Motors .

Bank of America and AIG were the biggest decliners.

The tech-heavy Nasdaq outperformed both the Dow and the S&P 500.

Barry Armstrong, a financial planner at Securities America Advisors in Boston, said he’s moving more of his clients’ money into stocks and other investments such as REITS for one very simple reason: “You can’t make any money in cash right now.”

He’s not jumping on the financials bandwagon, instead favoring technology and retail. Armstrong notes that U.S. personal-computer growth is 3 percent, but world-wide it’s 15 percent. He thinks the HPs and Dells of the world are undervalued.

“I am cutting back on foreign stocks,” Armstrong said. “I don’t think the dollar is going to  get any weaker.”

Crude oil fell sharply, to between $121 and $122 a barrel, after the Senate passed a bill that would close the so-called Enron loophole and allow for greater oversight of energy trading.

Oil's retreat boosted optimism for the cash-strapped consumer and the stores where they might be spending their money if they weren't pumping into their homes -- and their gas tanks. Retail stocks advanced, with notable gains in JC Penney , Saks and Tiffany .

JCPenney reported its earnings fell 50 percent but beat expectations. Meanwhile, over on Fifth Avenue, Tiffany raised its quarterly dividend and said it expects first-quarter earnings to beat its prior estimates, sending its shares up more than 4 percent.

Earnings are due out after the bell from Kohl's , and Saks reports next week.

Shares of Blockbuster rose after the movie-rental chain reported a profit of 20 cents per share, surpassing expectations by 5 cents.

CNET shares soared more than 40 percent after CBS announced plans to buy CNET for $11.50 per share, or $1.8 billion. CBS Chief Executive Les Moonves announced the deal, which would catapult the broadcast and media giant to one of the top 10 Internet companies, about two hours before trading began. The price tag amounts to a 41 percent premium on CNET's Wednesday closing price of $7.95.

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