Oil Boosts Stocks but Techs Weigh on Market

Stocks advanced, buoyed by a sharp drop in oil prices, but technology stocks dragged on the market after disappointing earnings from Apple and Texas Instruments.

"There’s an extremely high level of gloom and doom," Al Goldman, chief market strategist at Wachovia Securities, said on CNBC. But "last time I checked, they don’t ring a bell at the bottom -- we should be doing some selective buying," Goldman advised.

Goldman says commodities have been the market darling for nearly five years now and that dance is over and it's time to find a new partner.

"I want to stay away from most commodities such as gold and I want to buy basic Americana stocks when nobody else wants them," Goldman said.

Michael Cohn, chief investment strategist at Atlantis Asset Management, disagrees. He's looking for a buying opportunity to get back into oil and basic materials.

"There is further to go on these stocks on the downside but they've had a good, violent correction here. The're starting to get to compelling levels again."

"These super bull-market corrections are short and violent," Cohn said, pointing out that some of the biggest gainer in last week's rally were stocks that were the most heavily shorted.

Oil pulled back about $3 a barrel, trading between $127 and $128 a barrel as concerns subsided about a tropical storm heading toward the Gulf of Mexico.

Oil's slide gave airline stocks a lift. United parent UAL rocketed 50 percent, while Continental and American parent AMR jumped more than 30 percent.

Shares of Apple came under pressure after the computer and iPod maker exceeded the consensus earnings target but warned that current-quarter  earnings would miss analysts' expectations.

Shares of Texas Instruments also took a hit after it missed profit forecasts due to weakness in sales of cell-phone chips.

American Express delivered a doozy after the closing bell Monday: The credit-card provider posted earnings well below forecasts and warned it will no longer be able to deliver its projected earnings growth of 4 to 6 percent this year because of the economy.

"While we have been able to generate substantial earnings and returns relative to many in the financial sector, we do not expect to meet or exceed our long-term financial targets until we see improvements in the economy,'' Kenneth Cheanult, American Express's chairman and chief executive, said in a statement.

What investors were even more nervous about was AmEx's revelation that even some wealthy consumers are having a hard time paying their bills.

Offering some cause for optimism, UPS , which is widely seen as a gauge of the economy for the breadth of businesses its packages reach, hit its earnings target despite the drag of fuel prices and said it expects "modestly better results" in the second half.

It was just the opposite in the banking sector.

After a string of encouraging results from banks, Wachovia cut the party short, reporting an $8.86 billion second-quarter loss that was even worse than analyst estimates, and said it was cutting its dividend for the second time this year.

However, SunTrust Bank beat expectations. The bank said it earned 78 cents a share in the second quarter, excluding one-time items, ahead of 64 cents a share the market expected.

SunTrust also said it sold 10 million shares of Coca-Cola to improve its ability to cover losses. Coke shares edged higher.

Bank of America was the biggest gainer on the Dow after the bank on Monday became the fourth in a string of banks to surpass forecasts.

Citigroup , Wells Fargo and JPMorgan