Stocks Give Up Early Gains

The stock market rose in early trading on Wednesday as investors absorbed new data and corporate results, but gave up its gains by midday as the technology sector lagged.

While key sectors like energy and financial stocks recovered on Wednesday, after leading the overall market decline on Tuesday, technology shares were weighed down as Dell dropped more than 9 percent. The company said Tuesday that a weaker economy had lowered demand, flattening its sales in the quarter ended July 29, and it said it had pared low-margin sales. Its net income rose 63 percent in the quarter, but it lowered its revenue forecast for the rest of the year.

The declines in the equities market were slight — less than 1 percent in each of the three main indexes — but a reversal from the trend in early trading.

The market is recovering from a bout of volatility last week, and fell on Tuesday in the aftermath of a meeting between leaders of the euro zone’s two largest economies, France and Germany.

While many believe that the equities markets will remain unsteady for some time, bargain-hunters are benefitting from the recent lows.

“I think that the market is still reacting to a pretty oversold condition technically,” said Tom Samuels, managing partner for Palantir Capital Management, on Wednesday.

Mr. Samuels said that in the short term, meaning through Labor Day in early September, the market might continue to be “a little bullish,” but for now the respite was a time to reposition portfolios. Still, the balance was so tenuous that the financial markets were “one fundamental announcement” away, he added, from additional problems coming out of the euro zone or from economic statistics.

“There could be some more rough sailing ahead once we get out of August,” he said.

In early afternoon trading, the Standard Poor’s 500-stock index was down half a point. The Dow Jones industrial average was down 0.25 percent and the Nasdaq was slightly lower at 0.71 percent. The yield on the 10-year Treasury note was 2.17 percent, compared with 2.22 percent late Tuesday.

After the previous week’s extreme volatility and swings of hundreds of points, Wall Street tacked on gains over three consecutive trading days that had helped shares recover by Monday from losses in the wake of the Aug. 5 downgrade of America’s long-term credit rating. But then the markets declined on Tuesday after talks in Paris between Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France that analysts said fell short of easing concerns over how the euro zone’s finances would be handled.

On Wednesday, there appeared to be an early rally leading the riskier side of the market, and some strength in the commodity sector after a relatively benign reading in a key indicator on producer prices, Mr. Samuels noted.

The broadest indicator of wholesale prices edged up 0.2 percent in July, according to the Labor Department. Not counting food and energy, the indicator, the Producer Price Index, was up 0.4 percent, the most rapid rise in six months.

“The Treasury market is trading slightly lower this morning as investors renew their on-again, off-again love affair with riskier assets,” said Kevin H. Giddis, the executive managing director and president for fixed-income capital markets at Morgan Keegan Company.

“Favorable earnings reports appear to be boosting the appeal of stocks this morning, but the stronger than expected results from the P.P.I. are probably playing a role as well,” he added in a market commentary.

A range of stocks gained on Wednesday, with a rise of more than 1 percent in the utilities and telecommunications sectors. Consumer staples also rose as the markets responded to signals about the business sector and economy extracted from the latest corporate results.

Seasonal factors appeared to help Target, for example, which reported a higher quarterly profit helped by school related sales toward the end of the period. Its shares rose more than 4 percent. Staples rose 2.25 percent after it raised its outlook and after its earnings exceeded expectations.

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