Stocks up again Nasdaq sets record

March 18, 1994|By Bloomberg Business News

NEW YORK -- U.S. stocks gained for a second day yesterday as energy stocks rallied and investors started to anticipate higher first-quarter earnings.

Meanwhile, a Federal Reserve report showed less upward pressure on inflation.

The Nasdaq Combined Composite Index rose 4.86, to a record 803.85, eclipsing a Jan. 31 high of 800.47, as technology stocks including Lotus Development Corp., Intel Corp. and Oracle Systems Corp. rallied.

"Earnings are really picking up," said Don Hays, director of investment strategy at Wheat First Butcher & Singer in Richmond, Va. Expanding profits will drive share prices higher, he said. "I think we're in a powerful bull market that was postponed by [Federal Reserve Chairman Alan] Greenspan raising interest rates on Feb. 4."

The Dow Jones industrial average gained 16.99, to 3,865.14, paced by Caterpillar Inc., DuPont Co. and Aluminum Co. of America.

The Standard & Poor's 500 Index rose 1.48, to 470.80. Oil, chemical, drug, media and telephone stocks saw the largest gains.

Nine stocks rose for every eight that fell on the New York Stock Exchange, where volume was 304 million shares.

Stocks rose after the Federal Reserve Bank of Philadelphia said prices paid by manufacturers dropped in March, confirming the past two days' reports that wholesale and consumer price inflation remains in check.

Long-term interest rates, as reflected in the yield on the benchmark 30-year Treasury bond, fell to 6.78 percent after the Philadelphia Fed report, down from 6.80 percent Wednesday, before closing at 6.82 percent.

Yesterday's Fed report encouraged investors that the central bank won't raise short-term interest rates at a meeting of its policy-making council March 22.

"Most of the economic indicators earlier in the week were bullish on the lack of inflation, but the market is sputtering," said Peter Da Puzzo, senior managing director at Cantor, Fitzgerald & Co. "The market's not ready to make a move yet. January was great, and February was down, and now you have a lot of investors not knowing where to go."

In that environment, it wasn't a surprise to see investors turn to oil stocks, generally regarded as safe and secure, analysts said.

Atlantic Richfield Co. gained $2.75, to $101.875; Oryx Energy rose 50 cents, to $17.875; Amoco Corp. added 75 cents, to $55.375; and Unocal Corp. advanced 62.5 cents, to $28.625.

Hanson PLC, Intel Corp., Acclaim Entertainment Inc., Centex Telemanagement Inc. and Telefonos de Mexico American depositary receipts were the most active stocks in U.S. composite trading.

Caterpillar Inc. climbed $3.25, to $119.50. The earth-moving machinery maker plans to hire more people.

AMR Corp. dropped $1, to $63. The parent of American Airlines said its first-quarter loss will be wider than 24 cents a share.

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