NEW YORK — Wall Street showed some signs of stability Tuesday as investors, heartened by government plans to aid consumer lending companies, selectively bought more stocks after a huge two-day rally. Gains in blue chips gave the Dow Jones industrials and the Standard & Poor’s 500 index their first triple-session advance in more than two months.
Tech stocks lagged the market, sending the Nasdaq composite index lower, as investors bet that businesses will continue slashing capital spending in a recession. Some selling was widely expected after a two-day rally that sent the Dow up nearly 900 points, but the fact that the market performed so well — a contrast to its behavior after past rallies — was an indication that investors are regaining some of the confidence that has been decimated by months of bad economic news.
Three straight days of gains for the Dow and S&P indicate an underlying strength in the market, particularly in the face of a weak technology sector, said Richard E. Cripps, chief market strategist for Stifel Nicolaus.
But it’s “probably too premature” to say that the market has already hit its lowest level of the downturn, he said. “This bottoming phase is going to be a process.”
Many analysts said the market had reached a bottom weeks ago after the devastating losses of early October, only to see Wall Street take an even sharper dive just last week.
The Dow rose 36.08, or 0.43 percent, to 8,479.47. The index was up 164 points earlier in the session but also fell 161. The Dow last put a three-day advance together Aug. 26-28.
Broader indexes were mixed. The S&P 500 rose 5.58, or 0.66 percent, to 857.39, giving the index its first three-day rise since Sept. 10-12. The Nasdaq composite index, hurt by signs that companies are cutting back on technology spending, fell 7.29, or 0.50 percent, to 1,464.73.
Investors were encouraged Tuesday after the Treasury Department and the Federal Reserve said they planned to provide $800 billion to help unfreeze the market for consumer debt and to make mortgage loans cheaper and more available. The program is aimed at reviving moribund credit markets.
