Market resumes record advance Dow is up 50.69 points

new highs are set for IBM, Compaq, Dell, Microsoft

November 20, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK -- U.S. stocks resumed a record-setting advance yesterday, buoyed by rosy projections for computer companies like International Business Machines Corp. and Intel Corp.

The Dow Jones industrial average rose 50.69 to 6,397.60 to come within 3 points of its fourth century mark this month, continuing a 10-day advance interrupted Monday. IBM, up $7.25 to a nine-year high of $154, led the Dow gainers as technology shares rose on expectations for major growth in '97.

The broader S&P 500 index rose 5.14 to a record 742.16, and the Nasdaq composite index gained 8.05 to 1,262.62.

The Russell 2,000 index of small capitalization stocks rose 1.01 to 346.96; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, spurted 3,541 to a record 7,153.89; the American Stock Exchange market value index climbed 0.46 to 584.64; and the S&P midcap index gained 0.17 to 252.57, just shy of a record.

About 462 million shares changed hands on the New York Stock Exchange, more than its three-month daily average of 404 million shares. Advancers outpaced decliners by a margin of 1,442 to 1,046.

Compaq Computer Corp., Dell Computer Corp. and Microsoft Corp. all reached record highs after analysts at Goldman, Sachs & Co. made optimistic comments about the industry's prospects in a call early yesterday. Compaq rose $4.375 to $80.50; Dell gained 48.25 to $97.75, and Microsoft shares increased $5.50 to $155.875.

Shares of Sun Microsystems Inc. and Oracle Corp., the main companies behind development of network computers, fell on a day when other computer-related shares soared. Sun lost $1.375 to $57, and Oracle fell 37.5 cents to $46.125.

Hewlett-Packard Co. rose $3 to $52.75, even though the computer maker's fiscal fourth-quarter earnings fell short of Wall Street expectations. Merrill Lynch & Co. raised earnings estimates for Hewlett-Packard, citing a 20 percent increase in orders for computers during the quarter.

Chip maker Intel rose $5.375 to $120.75 after it was reiterated "buy" at Bear Stearns & Co.

U.S. bonds gained after a weaker-than-expected housing report bolstered expectations that the economy is growing slowly enough to let interest rates stabilize or fall. The yield on the benchmark 30-year Treasury bond dropped 3 basis points to 6.43 percent.

Shares of financially sensitive companies rose in reaction to bonds. Chase Manhattan Corp. climbed $3 to $92.50; BankAmerica Corp. gained $2 to $98; NationsBank advanced $1.875 to $99; and Bank One Corp. rose 41.625 to $44.125.

Retail shares got a boost from unexpectedly strong earnings reports from Dayton Hudson Corp. and Limited Inc. Dayton Hudson reported profit from operations of 51 cents a share, well above the 41 cents analysts expected. Its shares rose $1.25 to $37.625.

Limited reported net income of 15 cents a share, more than the 13 cents analysts expected and an increase from the 10 cents the company earned a year ago. Its shares gained 25 cents to $17.75. Gap Inc. rose 75 cents to $31.25.

CD Radio Inc. shares shed about half their value after a panel appointed by federal regulators said the company shouldn't get a preferential satellite radio license. The stock fell $43.875 to $4.50.

Ticketmaster Group Inc. shares fell 37.5 cents to $14.125 in their first day of trading, on concern the ticket seller won't be able to expand into new businesses and markets. The Los Angeles-based company sold 7.25 million shares, or a 32 percent stake, at $14.50 to raise $105 million.

Kmart Corp. shares and options rose amid speculation that Kohlberg Kravis Roberts & Co., the leveraged buyout firm famous for buying out RJR Nabisco Inc. for $26.4 billion in 1989, is buying Kmart shares.

Kmart is expected to report break-even earnings tomorrow. Its stock rose $1.625 to $11.25 in trading of 14.9 million shares.

Pub Date: 11/20/96

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