Stocks bounced back yesterday as bargain hunting emerged after an early sell-off fed by concerns about weak corporate earnings and the threat of bio-terrorism.

The Dow Jones industrial average edged up 3.46 points, or 0.04 per cent, to close at 9,347.62. Earlier, the Dow fell 105 points, or 1.1 per cent. The Nasdaq composite dropped 7.09 points, or 0.42 per cent, to 1,696.31. At its low, the Nasdaq was off nearly 40 points, or 2.3 per cent.

"It's actually severely undervalued right now, so any drop in the market that's due to temporary nervousness over anthrax or something like that is really a buying opportunity at this point," said Edgar Peters, chief investment officer at PanAgora Asset Management. Wall Street still braced for an onslaught of corporate earnings amid fears over the threat of bio-terrorism and the second week of US-led air strikes in Afghanistan. The bio-terrorism scares were heightened after a letter opened in the office of US Senate Democratic Leader Tom Daschle contained a powdery substance that tested positive for the deadly anthrax bacteria.