NEW YORK -- U.S. stocks rose yesterday, led by technology and retail issues, amid optimism that consumers and businesses won't curtail their spending in the wake of higher interest rates.
Better-than-expected earnings from ITT Corp. and Browning-Ferris Industries Inc., along with Boeing Co.'s move to trim costs by laying off more workers, also gave investors a reason to buy stocks.
"There's optimism about the corporate earnings picture, because the economy just seems poised to level off, not head down," said Thom Brown, managing director at Rutherford, Brown & Catherwood Inc. in Philadelphia. "Earnings are coming in nicely."
The Dow Jones industrial average rose 23.21, to 3,870.77, its highest in more than a week; most of the gain was captured in the last 45 minutes of trading. Shares of International Paper Co.; Sears, Roebuck & Co.; McDonald's Corp. and AT&T Corp. rose the most.
Shares of Boeing gained 37.5 cents, to $46.25, after being up as much as $1.125. The aerospace company said it plans to cut 7,000 of its employees -- nearly 6 percent of its work force -- this year as it slashes production of its smallest jetliner, the 737.
Technology issues rose for a second day amid optimism that higher interest rates won't keep consumers and businesses from purchasing computers, fax machines and cellular phones. The move by companies to upgrade existing computers with machines using Intel Corp.'s top-of-the-line Pentium microprocessor is also driving purchases of personal computers, analysts said.
Intel rose $1.5625, to $72.1875; Texas Instruments Inc. gained $1.75, to $71.375; Applied Materials Inc. soared $1.50, to $40.50; LSI Logic Corp. jumped $1.625, to $45.375; and Loral Corp. rose 75 cents, to $40.50. IBM rose 75 cents, to $74.375; Apple Computer Inc. added $1.50, to $41.625; 3Com Corp. vaulted $2.375, to $48.125; Digital Equipment Corp. rose $1, to $35.50; and Cisco Systems gained $1.25, to $35.50.
U.S. retailers posted strong sales gains for January, with several department-store and discount-store chains posting their best sales increases in more than a year.
Among broader market indexes, the Standard & Poor's 500 index gained 2.39, to 472.79, its highest close since 473.77 on Oct. 28. Long-distance, banking, retail, semiconductor and computer stocks rose the most. The Nasdaq composite index, laden with technology issues, surged 5.33, to 763.64, its biggest gain since a 6.02-point gain on Jan. 16.
Advancing stocks outpaced decliners by about four to three on the New York Stock Exchange, where about 322 million shares traded hands. The Russell 2000 index of small capitalization stocks rose 1.12, to 248.62; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock markets, rose 24.86, to 4,659.24; and the AMEX market value index added 1.53, to 438.45.