Bargain hunters lifted the markets to a sharply higher close with the Dow soaring 146 points to 12,735. Nasdaq surged 34 points to 2475.

On the upside

Perficient (Nasdaq: PRFT) raised it fourth quarter sales guidance.

Analysts upgraded Delta Air Lines (NYSE: DAL) citing valuation and over rumors of a possible merger between Delta and Northwest (NYSE: NWA).

Higher volume and more favorable pricing prompted Oneok Partners (NYSE: OKE) to lift its 2007 earnings outlook.

On the downside

LSI Industries (Nasdaq: LYTS) blamed disappointing sales and customer delays for warning that both second quarter earnings as well as 2008 results will fall short of expectations.

Standard & Poor's affirmed the junk status of WCI Communities (NYSE: WCI) citing acute liquidity challenges for the homebuilder.

Concerns about rising home loan delinquency rates weighed down shares of mortgage insurer PMI Group (NYSE: PMI).

In the broad market, advancing issues outpaced decliners by a margin of nearly 3 to 2 on the NYSE while decliners edged out advancers by nearly 10 to 9 on Nasdaq. The Russell 2000 which tracks small cap stocks climbed 7 points to 712.