Stocks Shake Off Earnings Worries

Stocks staged an impressive recovery Tuesday, ignoring an earnings warning from NBC Internet and a downgrade to Hewlett-Packard.

The ISDEX rose 6 to 734 after falling as low as 699, and the Nasdaq powered 83 points higher to 3851 after testing support at 3700. The broader market shook off concerns over Hewlett-Packard's earnings . The Dow rose 57 to 10,621 after testing its key level of 10,500. The S&P 500 surged 23 to 1469. Advancers led decliners 15 to 13 on the Big Board, where volume rose to 925 million shares. Breadth was even on the Nasdaq, with 1.4 billion shares changing hands. Weaker than expected retail sales and comments from Fed officials gave investors hope that the economy is slowing and that the Fed might not have to raise interest rates as aggressively. The Consumer Price Index, expected to show a 0.2% gain in May, is on deck for Wednesday.

Shares of NBC Internet , down 7 to 17 5/8, led portals and advertising companies lower. AskJeeves fell 1 3/16 to 20 1/4, About.com fell 4 3/4 to 33 1/4, and DoubleClick fell 61/64 to 43 1/32 after testing key support at 40, despite positive comments from Merrill Lynch's Henry Blodget. Goldman Sachs had sparked a sell-off in the stock yesterday on concerns over declining Internet advertising spending, which was also cited by NBC Internet.

Engage fell 1 3/8 to 15 9/16 despite beating analyst estimates after the close Monday. The company lost 2 cents a share in the third quarter, 5 cents better than forecast. Revenues rose 1034% to $58.7 million, primarily due to the acquisition of Flycast. However, there was some concern about cash burn. Engage spent $43 million in the quarter, finishing with a $90 million cash balance. However, the company's majority owner is CMGI, which could provide cash if need be. CMGI was unchanged at 56 1/2 during regular trading.

After the bell, CMGI reported that it lost $1.53 in the most recent quarter, better than the $1.83 analysts expected. The stock rose to 58 in after-hours trading. FatBrain reported that it lost 65 cents in the first quarter, better than the 88-cent loss analysts expected. .

Blodget made a broad call on business-to-consumer Internet stocks. He noted that only 5 of 400 are profitable, and said he expects that number to rise to 15 to 20 in three years. He also said the sector is going through a healthy shakeout. The B2C stocks he likes are DoubleClick, Yahoo! , up 2 to 139 7/16, Amazon.com , up 1/2 to 48 15/16, eBay, up 1 7/16 to 68 1/4, and Homestore.com , off 7/8 to 27 1/4, and Priceline.com , up 1 1/2 to 43 1/2.

Shares of recent IPO Hotel Reservations Network exploded to a new high, soaring 7 5/8 to 34 3/4.

Shares of Biznessonline.com gained 21/32 to 5 3/4 after Kaufman Brothers began coverage with a Buy rating and a price target of $15.

E.piphany surged 10 7/8 to 98 1/8 and BroadVision gained 3 1/8 to 52 1/8 after Salomon Smith Barney began coverage of both issues with a Buy rating. EarthWeb gained 1 13/16 to 15 1/6 after W.R. Hambrecht upgraded the firm to Strong Buy with a price target of $25.

Rumors of an impending buyout by Corning drove shares of SDL Inc up 20 33/64 to 282 1/2. Redback Networks gained 15 3/8 to 123 7/8. Brocade gained 11 5/16 to 145 5/16 on news of an alliance with Cisco .

Commerce One rose 4 5/16 to 56 3/8 on news that German software company SAP is taking a $300 million stake in the company.

RealNetworks rose 3 11/16 to 43 13/16 on news that Japanese electronics company Matsushita