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Equities extend rally

NEW YORK: Wall Street stocks extended their mostly earnings-driven rally into midday despite weakness in the bond market.

High technology stocks surged ahead after Intel Corp and Sun Microsystems Inc reported strong earnings following Monday's stock market close. Paper stocks rallied on upgrades by Merrill Lynch and Morgan Stanley.

The Dow Industrials were up 22 points at 5615. Advances led declines by four to three on volume of about 200 million shares.

U.S. Treasuries were down but off their lows, with the long bond falling 4/32 to yield 6.80 percent.

The Nasdaq Composite Index was up 10 at 1120. "The fact that the market is doing well after the strong day we had yesterday is a good sign, and the strength is drawn to a large extent from good earnings," said Marshall Acuff, portfolio strategist at Smith Barney. "We are in an earnings-driven rather than interest rate-driven phase.

The S&P paper index was up 46 points or 4.23 percent to 1135.

International paper rose 1-3/8 to 41-1/4, Champion was up three at 50, Georgia-Pacific was up 3-3/8 at 75-3/8, Williamette Industries was up 3-9/16 at 63-9/16, Boise Cascade rose three to 45-1/2, and Weyerhaeuser was up 1-1/2 at 48-3/4.

Banking stocks were mixed, feeling the undertow of the softer bond market. Banc one was down 1/2 at 34-1/2 after first quarter earnings fell short of the First Call estimate.-Reuter