NEW YORK -- U.S. stocks advanced yesterday for the second time this week as Philip Morris Cos. rebounded and better-than-expected earnings from Dell Computer Corp. buoyed the Nasdaq composite index.
Shares of Dell, which builds personal computers to order and sells them directly to companies, soared as its PC shipments grew 53 percent in the latest three-month period, triple the industry average. About 90 percent of Dell's sales are to companies.
Helped by International Business Machines Corp., Aluminum Co. of America and Sears, Roebuck & Co., the Dow Jones industrial average gained 19.60 to 5,666.88, a day after slumping 57.70 points.
Tuesday's slide, the worst in a month, came as a surge in bond yields raised concern that the Federal Reserve might raise interest rates at a policy meeting next week. Yields fell yesterday from 6.78 to 6.56.
In the broad market, the Standard & Poor's 500 index rose 1.85 to 662.05 with computer, retail and semiconductor stocks among the best performers. The Nasdaq composite index jumped 7.36 to 1,133.51, led by Intel Corp., Microsoft Corp. and Dell.
The Russell 2,000 index of small-company shares rose 1.09 to 326.72. The Wilshire 5,000 index of the biggest companies on the NYSE, American Stock Exchange and the Nasdaq stock market rose 21.16 to 6,469.93. The S&P Midcap 400 index rose 2.13 to 229.61 and the American Stock Exchange index rose 0.55 to 550.34.
Overseas stock markets were mixed. The Nikkei 225 index in Japan, the world's second largest market after the United States, jumped 0.56 percent; the FT-SE 100 index in Britain, the third largest market, rose 0.22 percent, and Germany's DAX index dipped 0.03 percent.
About 14 stocks rose for every nine that fell on the New York Stock Exchange. Sluggish volume totaled 343 million shares.
Computer-related shares advanced after Dell said earnings jumped 72 percent from a year ago in the second quarter ended July 28. Because prices for computer memory chips and other parts have plunged, Dell was able to slash prices, expand its market share and still boost profits.
Dell earned $1.15 from operations in the latest quarter, beating analysts' estimate of 86 cents a share and far above last year's profit of 66 cents. Dell jumped $4.125 to $60.75 on Nasdaq.
Apple Computer Inc. rose 25 cents to $22.75; Compaq Computer Corp. climbed $1.125 to $58.125; and IBM gained $1.875 to $111.25. Gateway 2000 surged $2.25 to $42; Microsoft rallied 75 cents to $124.875; and Intel gained $1.50 to $81.75. Rival computer-maker Hewlett-Packard Co. fell 12.5 cents to $43.625.
Unexpectedly strong profits from a handful of companies, along with General Mills Inc.'s purchase of Ralcorp Holdings Inc.'s breakfast cereal business, helped give the market a boost.
Ralcorp rallied $2.50 to $22.50 on the NYSE after it agreed to sell its cereal business for $570 million in stock and assumption of debt. General Mills fell 25 cents to $55.125.
Philip Morris rose $1.25 to $91.25, halting a slide that began Friday. Everest Reinsurance Holdings Inc. advanced 62.5 cents to $24.875; St. Paul Cos. rose 25 cents to $51.75; and Exel Ltd. gained 12.5 cents to $34.375.
Improved profits at a string of specialty retailers helped give stocks a shot in the arm.
The Sports Authority Inc. surged $2.875 to $21.875. The sporting goods chain earned 29 cents a share in its second quarter, up from 22 cents last year and above analysts' expectations of 27 cents. It was raised to "strong buy" at Alex. Brown & Sons.
Gymboree Corp., a children's clothing retailer, surged $1.50 to $29. While its second-quarter earnings were unchanged at 17 cents a share, they were a penny better than investors expected.
Gold stocks tumbled as the price of gold suffered their biggest drop since July 16, falling $1 an ounce to $390.70.
Pub Date: 8/15/96