Stocks ended higher yesterday as investors picked up bargains, a day after fears of a US economic slowdown and shrinking corporate profits pummelled the market to lows unseen in more than a year.

Driving the blue-chip rally were gains in basic materials, financial and energy stocks. But the Nasdaq composite closed only modestly higher with a gain of 7.41 points, or 0.32 per cent, at 2,340.16. Earlier, the Nasdaq was up nearly 91 points, but retreated in the afternoon as concerns about slowing corporate growth returned to overtake bargain hunting among technology names.

Tech investors continued to fret about slowing corporate profits after telecommunications stalwarts Lucent Technologies Inc. and AT&T Corp. became the latest high profile companies to warn that their results will disappoint.