STOCKS staged a technical rebound yesterday as good news from Wall Street led the local market up in thin turnover. The Hang Seng Index reversed three days of losses, closing 65.40 points higher at 9,841.06, a gain of 0.67 per cent. Turnover was modest at $3.39 billion, up from the revised $2.83 billion for Tuesday. Volume was light with 1.35 billion shares changing hands. Trading was spread throughout the market although a lot of interest centred in the two second liners Ng Fung Hong and Guoco. Brokers said the main reason for the rise was the rebound on Wall Street. The Dow Jones Industrial Average gained 28.18 points to 4,783.66 on Tuesday after a number of better than expected earnings results. Kent Rossiter, senior manager for institutional sales at Sun Hung Kai Securities, said: 'There is a lack of local direction and people are looking towards Wall Street for guidance.' Stocks also got a boost from US treasury bonds, whose yield tumbled seven basis points to 6.32 per cent on. This makes equities relatively more attractive investments and lowers the cost of corporate borrowing. Overall the tone of the market is still cautious as the lack of local news keeps turnover dampened. Nial Gooding, head of sales at Kleinwort Benson, said: 'There is not a lot going on. We just don't fire people's imagination domestically or internationally.' The index opened the day with some strength, climbing from the previous close of 9,775.66 to reach the day's high of 9,860.59 after 20 minutes of trading. It then came off sharply before trading sideways to reach the morning close at 9,833.75, an intra-day rise of 58.09 points. The afternoon saw further selling pressure before the index found support at 9,800 and climbed through to the close. Among the 33 blue chips, 18 rose, six were unchanged and nine lost value. Banking counters led the market higher with the Hang Seng finance sub-index climbing 119.57 points or 1.28 per cent, to 9,464.41. HSBC Holdings was the biggest net gainer among all stocks, climbing $1.50 to $113.50 on news HSBC Americas had recorded a 33 per cent increase in third quarter profit. Other bank stocks were also strong. Hang Seng Bank gained 75 cents to $64.75 and Bank of East Asia rose 30 cents to $27.50. Utilities also fared well. The Hang Seng utilities sub-index rose 67.08 points or 0.65 per cent to 10,309.53. China Light & Power climbed 50 cents to $40.50, Hongkong Electric rose 25 cents to $26.70 and Hongkong Telecom gained five cents to $13.50. Conglomerate CITIC Pacific bounced back from its run of losses, adding 45 cents to $23.85. CITIC had lost $1.20 over the previous five days on news of the downgrading of its Chinese parent and a placement of shares by Morgan Stanley. Cathay Pacific continued to take punishment on news one of its former employees has been hired to help launch a rival airline in Hong Kong. Cathay fell 15 cents to $11.45 after falling 40 cents on Tuesday. Parent Swire Pacific also took a beating, losing 50 cents to $60.25. Selected second and third liners also attracted a lot of interest. The heaviest traded stock was new listing Ng Fung Hong, which closed at $3.475 with 113.94 million shares changing hands. The debut of the food importer was judged a failure by the market, which had been expecting it to close between $3.80 and $4. Patrick Chia, analyst with Cheerful Securities, said: 'It is very disappointing to see the share price close so low. Most people were surprised.' Brokers said there was heavier than expected profit-taking from some of its institutional subscribers. Selling pressure also carried over to its competitor, Guangnan Holdings, which lost 12.5 cents to $2.50. The biggest turnover of the day was made by financial counter Guoco, which closed unchanged at $37.40 after turnover of $436.79 million. Interest was stirred up by a placement of shares by one of the directors towards Singaporean institutions. Trading in computer disk manufacturer Hanny Magnetics resumed with the counter suffering heavy losses. Hanny lost 3.8 cents to 13.7, a loss of 21.7 per cent. Mr Rossiter said: 'It is really speculative. People wonder whether Li Ka-shing is really committed to this counter.'