Optimism on profits sends Dow yet higher Industrial average jumps 11.56, to 4,864.23, setting 54th high of year


NEW YORK -- U.S. stocks set record highs for a second day yesterday as technology and financial shares rallied on optimism that companies will post robust profits.

The Dow Jones industrial average jumped 11.56, to 4,864.23, reaching its 54th high this year. The 30-stock average chalked up a 1.4 percent gain over two days, after jumping 55.64 Wednesday. American Express Co., United Technologies Corp. and Caterpillar Inc. gained most.

About 1,158 stocks fell and 1,069 shares rose on the New York Stock Exchange.

The Standard & Poor's 500 index, a broader measure of the market, rose to its 66th record for the year. The index overcame earlier losses yesterday and gained 1.55 to reach 593.26, after jumping 5.30 points Wednesday.

The technology-laden Nasdaq composite index, which missed out on Wednesday's rally, staged a comeback yesterday, fueled by gains in Intel Corp., Microsoft Corp. and Oracle Corp. The index climbed 17.66, to 1,065.60, recouping the week's losses.

rTC Among other gains, the Russell 2000 index reached its highest level in over a month, rising 1.66, to 303.96. The Wilshire 5000 index climbed 22.89, to 5,866.1.

The American Stock Exchange market value index slipped 0.42, to 530.81.

About 379 million shares changed hands, compared with 360 million Wednesday. That's also above the 347 million daily average trading volume over the past six months.

A report showing that orders for semiconductors rose more than expected in October and exceeded shipments convinced many investors that chip-company earnings will expand enough to meet expectations. The Semiconductor Industry Association's book-to-bill report was released after the market closed yesterday.

The chip group lagged the market during the past two days. Investors grew concerned that orders were slowing after Cirrus Logic Inc. said Tuesday that one of its customers canceled orders for graphics and audio chips. That led many analysts to lower their opinions and earnings estimates for such companies as Intel, Applied Materials and Micron Technology Inc. yesterday.

Among semiconductor stocks that soared, Intel rose $3.0625, to $69; Applied Materials Inc. shares soared $4.25, to $52; and Micron Technology's shares rose $3.125, to $65.125.

Software maker Intuit Inc. strengthened $2.625, to $81.50, after it agreed to buy Galt Technologies Inc. for an undisclosed amount.

Fractal Design Corp.'s stock rose 38 percent in its first day of trading. Shares of the maker of graphic and digital art software jumped $4.125, to $15.125.

Financial stocks were among the big gainers as the prospect of lower interest rates brightened the outlook for their profits.

Among those that climbed, American Express rose $1.75, to 43.375; NationsBank Corp. rose $1.50, to $69.375; BankAmerica Corp.'s stock climbed $1.375, to $61.625; and Merrill Lynch & Co. jumped $3, to $60.50.

Stocks' gains were tempered by a drop in bond prices. The yield on the 30-year benchmark bond rose 3 basis points, to 6.28, after a White House spokesman said there were "no chances at this point" of resolving an impasse with Congress over raising the national debt cap to avert a government shutdown next week.

Among stocks that boosted the market, Bristol-Myers Squibb Co.'s AIDS drug Zerit has been recommended for full approval to the Food and Drug Administration by an advisory panel, the Wall Street Journal reported. That sent the drug company's stock up $1.125, to $79.

Gap Inc. shares jumped $3.625, to $47.50, after the retailer reported that third-quarter earnings jumped 25 percent, beating Wall Street's expectations. Any sign of strength from retailers has been rewarded, because consumers are spending less and overall clothing sales have been sluggish.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.