AP Blue-chip shares rose sharply as the new year's selloff eased in the broader market.

The Dow Jones industrial average closed 124 points higher, to 11,122, led by International Business Machines and Minnesota Mining and Manufacturing.

Meanwhile, the technology-heavy Nasdaq composite index, which had dropped more than 166 points in the session, closed 24 points lower, as some of the index's biggest tech names flipped into the positive.

Analysts say bargain hunting helped stem losses triggered by interest rate worries.

``There is some bottom feeding,'' said Larry Rice, ``But I would be suspect of any rally here as long as interest rates are so high. I think you are just getting a reflex bounce.''

In company news, online retailer Amazon.com Inc. said its fourth-quarter sales rose to $650 million from $253 million a year ago, but that higher sales don't yet mean lower net losses. It was down nearly 14 points at 68-1/4.

IBM rose 6-5/16 to close at 118-3/8, after news that more products would be available for the computer maker's version of the UNIX operating system, while 3M rose following a price target upgrade by Prudential Securities.

The strengthening came despite the fact that the benchmark 30-year treasury bond was down more than a point, driving up the yield.

The Nasdaq's technology components including software giant Microsoft Corp. closed 1-3/16 higher to 113 after a bruising earlier in the session.

Dow strength also came from market workhorses such as chemical giant Dupont and oil major Exxon Mobil.

With the market already worried that the Federal Reserve will make aggressive interest rate hikes to cool the hot economy, November factory orders came in early Wednesday stronger than expected, with a rise of 1.2 percent versus the 0.9 percent increase expected by economists polled by Reuters.

With the markets' rate fears on edge, analysts will pay close attention to economic data, examining it for signs of inflation that would encourage rate more interest rate hikes from the Federal Reserve beginning at its February meeting.

Only a week ago, the market was heavily expecting a rate hike of 25 basis points in February, but now a rate hike of at least that amount, and possibly 50 basis points, is now expected. Two influential analysts in the past two days predicted a 100-point increase for the year.