Tech Stocks Rally Amid Global Credit Crisis

The U.S. government may take equity stake in banks in order to secure a return on its bailout efforts.  Meanwhile, blue chip IBM made an early 3rd quarter profit announcement to boost the Dow by 50 points to 9308.  The tech-heavy Nasdaq surged 20 points to 1761.

On the upside

IBM (NYSE: IBM) posted profits that beat lowered estimates and reaffirmed its earnings forecast through the rest of the year.

GeoEye (Nasdaq: GEYE) released its first batch of imagery from its satellite.

Bargain hunters snapped up airline stocks on an analyst upgrade due to favorable oil prices.  Shares of United Airlines (Nasdaq: UAUA) and Continental Airlines (NYSE: CAL) rose.

On the downside

Citigroup (NYSE: C) and Wells Fargo (NYSE: WFC) continued to spar with the Federal Reserve unable to reach a resolution to sell Wachovia Bank (NYSE: WB).   Wells Fargo had offered to buy all of Wachovia while Citigroup wanted only the assets with government backing.

Shares of Prudential Financial (NYSE: PRU) tumbled on worries that it may be the next financial services company to face significant write-downs.

J.P. Morgan Securities lowered its profit and dividend outlook for regional banks.  Shares of Fifth Third Bankcorp (Nasdaq: FITB) and Zions Bancorp (Nasdaq: ZION) promptly fell.

In the broad market, advancing issues outpaced decliners by a margin of nearly 6 to 5 on the NYSE and by more than 4 to 3 on Nasdaq.  The Russell 2000 which tracks small cap stocks added 2 points to 548.