WALL Street stocks closed higher as bargain hunters looking for deals ignited a burst of late buying and reversed earlier losses.

The Dow Jones industrial average rose 29.63 points to close at 7,037.83, erasing a 35-point loss hit earlier in the day. Broad-market indexes also ended higher, including the Nasdaq which has been battered in the past week by a sell-off in technology stocks.

Stocks started the trading day higher, adding to Monday's drive that saw bargain seekers buying up technology stocks after several days of profit-taking.

But stocks weakened by midmorning and spent much of the day in negative territory as the market tried to determine its short-term direction.

By late afternoon, stocks began to bounce back, thanks to strength in technology and retail shares.

Investors, however, remained cautious ahead of Federal Reserve chairman Mr Alan Greenspan's testimony to Congress.

Advancing issues outnumbered decliners by a five-to-four margin on the NYSE.