Stock rise is led by computers and oils Nasdaq surges 13 points to a record 1,166

Dow industrials up 23

April 24, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK -- U.S. stocks rose for a second day, as better-than-expected earnings from Digital Equipment Corp. sparked a rally in computer issues. Oil shares climbed, one day after a spate of surprisingly strong first-quarter profits.

Led by Exxon Corp., Chevron Corp. and Texaco Inc., the Dow Jones industrial average climbed 23.85 to 5,588.59.

The Nasdaq composite index jumped 13.26 to an all-time high of 1,166.76, its fourth consecutive record and its 15th of the year. Volume on the Nasdaq stock market reached 650.1 million shares, surpassing the record set Feb. 22.

So far this year, the Nasdaq is ahead 10.89 percent, almost double the 5.79 percent return on the Standard & Poor's 500 index.

The S&P 500 rose 3.70 to 651.59 yesterday, and the Russell 2000 index of small-company shares climbed 2.52 to a record 343.51, its 15th new high of the year.

The Wilshire 5000 index rose 41.94 to 6,467.74, eclipsing an April 4 record.

New York Stock Exchange volume rose to 452.7 million shares, above this year's average 422.8 million. Advancing stocks outpaced decliners by 13 to 10 on the Big Board.

The Morgan Stanley high tech index of 35 stocks spurted 7.24, or 2.18 percent, to 339.29, bringing its gain since Jan. 15 to 19.3 percent.

Digital Equipment shares rose $5.25 to $60.625 after the computer company said fiscal third-quarter earnings jumped 68 percent from the corresponding period last year, surpassing expectations.

Investors saw DEC's strong profits as a sign that earnings elsewhere in the computer, software and semiconductor industries may outpace those of other businesses.

The Philadelphia semiconductor index vaulted 6.38, or 3.26 percent, to 202.37, led by Novellus Systems Inc., up 4.375 to 55.50.

"When the economy comes back strongly, this being the 1990s, you say, 'Buy the chip makers,' " said James Griffin, money manager at Aeltus Investment Management Inc., which oversees assets of $34 billion. "The core of the economy is no longer melting the metals and grinding them and pounding them and shaving them. It's all formatted on a little chip of silicon."

Iomega Corp. rose $10.625 to $51.875 after the maker of removable disk drives declared a 2-for-1 stock split.

Compaq Computer Corp. rose $1.50 to $43.875, and Hewlett-Packard Co. jumped $1.875 to $103.125.

Oil stocks surged after big producers reported better-than-expected profits yesterday, in some cases the best since late 1990, leading some analysts to raise this year's earnings forecasts.

Exxon rose $2.625 to $84.625; Chevron rallied $1.75 to $57.50; Mobil Corp. gained $3.25 to $116; Amerada Hess Corp. added $2 to $57.50; Texaco Inc. added $1.75 to $85.625; and Amoco Corp. rose $1.625 to $73.75.

Travelers/Aetna Property Casualty Corp. shares rose $2.375 to $27.375 in their first trading day, and were the most active issue on U.S. exchanges, as more than 14 million shares changed hands. Travelers Group Inc. formed the unit by paying $4 billion for Aetna Life & Casualty Co.'s property and casualty unit and merging it with its own insurance subsidiary. Travelers rose $1.125 to $62.625.

Stocks might have posted even larger gains were it not for investors' doubts as to whether the recent rebound in U.S. economic growth is very large, or sustainable.

"The bounce in the economy looks to us to be ephemeral and unsustainable," Merrill Lynch & Co. chief investment strategist Charles Clough wrote yesterday. Consumer spending, including

auto sales, may soon slow, he said.

Still, retailers saw some of the market's largest gains yesterday after retail sales in the week ended April spurted 6.88 percent, according to Johnson Redbook Service's weekly report.

Pub Date: 4/24/96

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