* IBM lends boost to investor sentiment, stock up
* Jobless claims drop, tempers worry about economy
* Financials gyrate as short selling ban lifted
* Dow up 0.5 pct, S&P 500 up 0.4 pct, Nasdaq up 1 pct
(Updates to early morning)
By Ellis Mnyandu
NEW YORK, Oct 9 (Reuters) - U.S. stocks rose in skittish
trade on Thursday as investors snapped up beaten down shares
after a six-day slide and a solid profit from IBM <IBM.N>
spurred hope that the credit crisis might not be stifling all
demand.
Shares of International Business Machines Corp, a
technology services giant, rose 2 percent, making the stock a
top boost to the Dow, while Apple Inc <AAPL.O> , another tech
bellwether, led the Nasdaq with a 4 percent gain.
But trading was skittish, with some market participants
away for the Jewish Yom Kippur holiday.
The hunt for cut-price shares also fueled a recovery in the
shares of natural resource companies, with aluminum producer
Alcoa <AA.N> , rebounding nearly 6 percent after the stock was
hammered in the wake of a profit shortfall that the company
posted on Tuesday.
"What we're seeing is just a bear market rally. An oversold
rally," said Dave Rovelli, managing director U.S. equity
trading at Canaccord Adams in New York. "You could see a
significant rally over the next couple of days. The market is
so oversold."
The Dow Jones industrial average <> added 48.91 points,
or 0.53 percent, to 9,307.01. The Standard & Poor's 500 Index
<.SPX> climbed 4.08 points, or 0.41 percent, to 989.02. The
Nasdaq Composite Index <> shot up 17.03 points, or 0.98
percent, to 1,757.36.
IBM shares rose to $92.45 on the New York Stock Exchange,
while Apple climbed to $92.83 on Nasdaq.
Even so, lowered profit estimates by some major retailers,
including TJX Cos Inc <TJX.N>, fueled some caution about the
outlook for consumer spending. TJX shares fell 3.7 percent to
$26.61 after the off-price retailer cut its profit outlook.
The expiration of a U.S. Securities and Exchange
Commission's ban on short selling in more than 950 financial
stocks cast a pall on individual financial stocks, including
Morgan Stanley <MS.N> , whose shares slid 11 percent to $14.88
on the NYSE.
Short sellers borrow shares and sell them in anticipation
that the price will fall. They then buy the shares back at the
lower price, returning them to the broker, and profiting on the
price decline.
On the economic front, a government report showed the
number of U.S. workers filing new claims for jobless benefits
fell 20,000 last week, in line with forecasts as the impact of
hurricanes Gustav and Ike eased. For details, see
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(Editing by Kenneth Barry)
