The blue-chip Dow Jones industrial average, which fell 58.05 points Tuesday, was ahead 17.16 points, or 0.20 percent, to close at 9,730.96. The tech-heavy Nasdaq composite index, which dropped 47.81 points in the previous session, gained 39.85 points, or 2.1 percent, to close at 1,922.38.
The broader New York Stock Exchange composite index was ahead 3.35 to close at 577.62 while the Standard & Poor's 500 index was ahead 8.87 to close at 1,128.18.
The American Stock Exchange composite index gained 6.99 points to close at 830.39 while the Russell 2000 Index was ahead 8.02 to 477.45. The Wilshire Total 5000 market index was ahead 96.96 points to close at 10,522.08.
Volume was 1.17 billion on the Big Board and 1.84 billion on the Nasdaq Stock Market.
Analysts said semiconductor issues rose after an industry group said orders and shipments rose in December, indicating improvement in the battered sector. An investment bank upgrade of the sector also helped boost enthusiasm.
Makers of equipment used to build semiconductors were in focus after a report that North American makers of microchip-making equipment saw new orders rise about 7 percent and shipments gained less than one percent, according to Semiconductor Equipment and Materials International.
A closely watched ratio of orders to shipments, known as the book-to-bill ratio, was 0.78 in December, an improvement from a ratio of 0.73 in November.
Analysts noted the rise came as investors digested a fresh round of corporate results.
This week is one of the busiest for earnings reports. About 155 of the companies in the S&P 500 and half the 30 Dow components are expected to release corporate results.
Meanwhile, a prominent panel of economic forecasters said the U.S. economy is likely to emerge from recession in the second quarter of 2002, although the recovery will be slow and unemployment will remain high the rest of the year.
The American Bankers Association's economy advisory committee said it expects the economy to grow 0.3 percent in the second quarter, ending a year of recession.
Over the course of 2002, the economy will grow just 2.2 percent, well below its potential, it said.
The unemployment rate, now 5.8 percent, will climb to 6.3 percent by the third quarter and won't drop below 6 percent until next year.
"Powerful forces for recover are in place: aggressive, monetary and fiscal policy, low energy prices and a significant inventory correction," said Gregory Miller, chairman of the committee.
Still, he said, "capital spending in prior years has generated excess capacity in most industries and until capacity utilization rates rise significantly it will be difficult to sustain the economic recovery."
The Federal Reserve, however, isn't likely to cut interest rates much more.
"If the Federal Reserve is not through cutting rates, it's very close to the completion of its easing cycle" the group said.
The committee said it expects the Fed to begin raising rates in the third quarter.
Elsewhere on the economic front, overall consumer confidence remained unchanged for the third week in a row, according to the latest ABC News/Money Magazine poll.
The consumer comfort index held steady at a five-and-a-half-year low of minus 13 in the week ended Jan. 20. The index fell to this level four weeks ago -- its lowest level since August 1996 -- and hasn't budged since.
According to the latest survey, 33 percent of respondents expressed confidence in the economy, up from 32 percent the week before.
Also, 58 percent of those polled said their own finances were in good standing, up one point from the prior week. In addition, 40 percent of respondents assessed the buying climate as good, down one point from the week before.
The consumer comfort index was based on a random survey of 1,034 respondents nationwide ended Jan. 20. The index measures typical Americans' confidence in three areas: the national economy, their own finances, and their willingness to spend money, according to the report. The poll has a margin of error of plus or minus three percentage points.
And, retail sales remained above plan in the U.S. last week, upon the resumption of normal operating conditions following the holiday season.
Redbook's latest report of national retail sales showed sales rose 4.0 percent during the week ended Jan. 19 after seasonal adjustment from the same week in December.
The report also showed sales during the period climbed 1.4 percent from the same period the year before.
Month to date, January was 1.6 percent above January of last year.
And, the Bank of Tokyo-Mitsubishi and UBS Warburg reported in their Weekly Chain Store Sales Snapshot that chain store sales moved higher in the latest week, but discounters had a better week than department stores.
U.S. chain store sales rose 0.7 percent during the week ended Jan. 19, after edging 0.6 percent higher one week earlier, the Bank of Tokyo-Mitsubishi and UBS Warburg said.
The BTM/UBSW Weekly Chain Store Sales Snapshot is compiled from seven major discount, department and chain stores across the country that report their weekly results.
Those stores include J.C. Penney, Sears, Target, Kmart, Wal-Mart, Federated Department Stores Inc. and May Department Stores Co. The BTM/UBSW index measures sales growth with the year 1977 equaling 100.
Meanwhile, U.S. Treasury prices drifted slightly lower. The 10-year bond eased 25/32 to 99 27/32. Its yield, which moves in the opposite direction of its price, rose 5.02 percent.
In Europe, stock prices ended higher in London, Frankfurt and Paris in moderate trading. The London International Stock Exchange's blue-chip FTSE-100 index rose 36.0 points, or 0.70 percent, to 5,185.2. The German DAX index gained 55.15 points, or 1.09 percent, to 5,100.87 and the French CAC-40 index added 4.09 points, or 0.09 percent, to 4,450.81.
Analysts said stocks were lifted by strength in the drug sector and the oil patch.
The oil and gas sector was lifted as crude prices rose after U.S. refiners said they were cutting back on output.
The drug sector got a boost from German pharmaceutical group Schering after Goldman Sachs raised its stock to market outperformer from market perform. The investment bank said it raised its recommendation partly on the strength of Schering's oral contraceptive drug.
Earlier in Asia, prices on the Tokyo Stock Exchange ended slightly lower in narrow range bound trading, turning negative in the closing minutes of trading on profit-taking and weakness in the banking sector. Japan's blue-chip Nikkei Stock Average of 225 selective issues, which fell 229.27 points Tuesday, slipped another 10.07 points, or 0.10 percent, to 10,040.91. The broader Topix index lost 9.93 points, or 1.0 percent, at 975.20 -- its lowest close since May 1985.
Analysts said investors took a wait-and-see stance ahead of quarterly earnings reports by major companies later this week, while the expected further unwinding of cross shareholdings by corporations discouraged bargain hunting.
Analysts said the market was also pressured by weakness in the banking sector. Banks sank on fears over their exposure to troubled U.S. retailing giant Kmart.
Elsewhere in Asia, prices ended slightly lower on the Hong Kong Stock Exchange, weighed down by weakness in mainland telecommunications stocks, in a quiet trading session. The blue chip Hang Seng Index slipped 35.55 points, or 0.30 percent, to 10,762.14.
Analysts said investors opted for the sidelines awaiting U.S. Federal Reserve Chairman Alan Greenspan's testimony to the Senate on Thursday and the U.S. Federal Open Market Committee meeting next week.
Meanwhile, stocks ended higher on the South Korean Stock Exchange, led by semiconductor stocks, on hopes of a sustained industry recovery. The Korea Composite Stock Price Index, or Kospi, gained 18.26 points, or 2.5 percent, to 742.62.
Analysts said semiconductor shares gained from losses earlier in the morning on reports that U.S. semiconductor equipment makers' order volume in December was higher.
Meanwhile, prices ended slightly lower on the Taiwan Stock Exchange. The tech-heavy Weighted Index lost 34.32 points, or 0.59 percent, to 5,769.78, after swinging between gains and losses earlier in the day.
Analysts said investors locked in gains after the cabinet reshuffle boosted the index by about 4.5 percent since Monday.
Elsewhere around the Pacific region, prices ended little changed on the Australian Stock Exchange. The All Ordinaries Index added 1.10 points, or 0.03 percent, to 3,363.70.
Experts said a sharp spike in Australia's consumer price index in the fourth quarter from the third helped bolster confidence in the share market.
The Australian Bureau of Statistics said the CPI rose 0.9 percent in the fourth quarter from the third, for an annual increase of 3.1 percent, above the Reserve Bank's 2 percent to 3 percent target band, which erodes the chances of a further monetary easing this quarter.