US stocks fluctuate

Wall Street managed a sharp rebound today, rising sharply despite allegations of insider trading at ImClone and more profit warnings.

But while the Dow Jones industrials rose 100 points, analysts attributed much of the buying to technical factors, not a turnaround in investor sentiment.

A cautious mood dominated the session following a big selloff on Tuesday. New charges of unethical business practices this time, the arrest of former ImClone chairman and CEO Sam Waksal on insider trading charges added to the market’s ongoing uneasiness, as did a string of profit warnings from such companies as Monsanto.

The Dow Jones industrial average closed up 100.45, or 1.1%, at 9,617.71. On Tuesday, the Dow fell 128.14 to its lowest close since November 5, when it stood at 9,441.03.

Broader indicators also finished higher. The Nasdaq composite index rose 21.94, or 1.5%, to 1,519.12, having dropped 33.51 on Tuesday to its lowest close since October 2.

The Standard & Poor’s 500 index advanced 6.66, or 0.7%, to 1,020.26 following Tuesday’s loss of 17.14, which had brought the index to its lowest close since September 26.

But analysts said the gains were meaningless and attributed them to a practice commonly called short covering. When short covering occurs, investors are forced to buy stock to replace shares that they earlier borrowed and sold on the expectation that the market would fall further.

Worries about business ethics, along with disappointing earnings and outlooks have pressured Wall Street for weeks, sending the major indexes near the September 21 lows that followed the terrorist attacks.

After trading lower most of the session, ImClone closed up 28 cents at dlrs 7.83, having shed 90% of its value since December because of the rejection for star drug Erbitux by the Food and Drug Administration and investigations into possible insider trading. On Tuesday, the company’s new chairman and CEO, Harlan Waksal, told shareholders the application it submitted for Erbitux was flawed.

But ImClone’s troubles, particularly the arrest of its former CEO, hurt Martha Stewart Living Omnimedia, which fell dlrs 2.10 to dlrs 15 on reports that Martha Stewart, a friend of Sam Waksal, sold her remaining 3,000 ImClone shares on December 27. Stewart’s spokesman had said she received no inside information on ImClone.

Among gainers, Dow industrial Procter & Gamble surged dlrs 4 to dlrs 93 after it raised its fiscal fourth-quarter earnings estimate, and Merrill Lynch upgraded its shares to ‘‘strong buy’’ from ‘‘buy’’.

Maytag climbed dlrs 2.97 to dlrs 45.27 after saying its second-quarter profits will beat analysts’ expectations.

Advanced Micro Devices rose 34 cents to dlrs 9.67 after Prudential Securities raised its recommendation on the chip maker’s shares to ‘‘hold’’ from ‘‘sell’’.

Poor earnings outlooks drove down other stocks. Safeway dropped dlrs 4.42 to dlrs 31.76 after the grocery store company reduced its second-quarter and fiscal year profit forecasts.

Agriculture company Monsanto, which also lowered its estimates, fell dlrs 1.30 to dlrs 25.55.

Despite the late-day rally, declining issues narrowly outnumbered advancers 16 to 15 on the New York Stock Exchange. Volume was heavy at 1.72 billion shares, compared with 1.39 billion on Tuesday.

The Russell 2000 index, which tracks smaller company stocks, inched up 0.21 to 462.99, following Tuesday’s loss of 6.51.