Stocks rise as Dow scampers 69 points Intel and IBM strong

Wall Street

market also bolstered by optimism about Fed

September 30, 1997|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose yesterday for a second day as Intel Corp. and International Business Machines Corp. rallied on optimism that computer-related companies will report unexpectedly strong third-quarter profits.

The Dow Jones industrial average rose 69.25 to 7,991.43, after advancing 74 points Friday. The 30-stock average rallied 4.8 percent this month, but still is trading below its record 8,259.31 Aug. 6.

The Standard & Poor's 500 index rose 8.12 to 953.34 and the Nasdaq composite index rose 12.74 to 1,694.98.

Stocks were boosted by optimism that the Federal Reserve won't raise interest rates today when its policy-making arm assembles. While investors aren't convinced that the central bank is done raising borrowing costs in 1997, the chances of a move today are slim.

Among broad market indexes, the Russell 2000 index of small capitalization stocks rose 2.43 to a record 451.31; the Wilshire 5,000 index surged 68.20 to 9,215.39; the American Stock Exchange composite index advanced 4.82 to a record 694.66; and the S&P 400 mid-cap index jumped 1.99 to 331.87.

Some 1,645 stocks rose and 1,226 fell on the New York Stock Exchange. More than 471 million shares changed hands, below the three-month daily average of 529 million shares.

The biggest gainer in the S&P 500 was semiconductor maker Intel, which climbed $2.3125 to $95.375. Shares of computer-related shares advanced on optimism that demand for technology will continue to grow, boosting profits for many companies in the sector. IBM rose $2.375 to $105.Earlier this month, Compaq Computer Corp. boosted its revenue goal by 2000 to $50 billion from $40 billion.

The Morgan Stanley high-tech index rose 9.15 to 530.77. Microsoft Corp. rose $1.125 to $134.50; Bay Networks Inc. rose $1.75 to $39.4375; Compaq rallied $2.625 to $77; Texas Instruments Inc. surged $4.0625 to $138.625; and America Online Inc. rose $3.9375 to $75.50.

Metricom Inc. rose $3.625 to $10.75 after the company said billionaire Paul Allen raised his stake in the company to 32.9 percent, securing additional backing for its innovative wireless Internet technology. Allen co-founded Microsoft with Bill Gates.

After an early slump, shares of financial companies rebounded as optimism about today's Fed meeting spread. Among bank stocks that rebounded after early losses, Citicorp gained $1.0625 to $134.1875; Chase Manhattan Corp. rose $1.0625 to $118.4375; J. P. Morgan & Co. added $1.1875 to $115.125; and BankBoston Corp. added $2.4375 to $91.1875.

Travelers Group Inc. was an exception, falling 75 cents to $68.4375. Last week, the insurance and brokerage company said it would buy Salomon Inc. for $9 billion.

Salomon's securities unit lost at least $200 million before taxes in its investment banking and equities divisions in the past 12 months, according to people familiar with the situation.

Paine Webber Group Inc. rose $2.5625 to $47.625 amid speculation that it may be a takeover target, traders said. Joseph Grano, president of the company's PaineWebber Inc. securities unit, told investors that the firm isn't in merger talks.

Coca-Cola Co. rose 62.5 cents to $62.5625. The world's largest maker of soft drinks said it expects worldwide case volume to rise by 9 percent to 10 percent in the third quarter. Analysts had expected an increase of 8 percent to 9 percent. Rival PepsiCo Inc. rose 81.25 cents to $41.

Centex Corp., a construction and homebuilding company, gained $5.375 to $57.625. Ivy Schneider, an analyst at Salomon Brothers Inc., said there wasn't immediate news to spur the stock's advance, but noted that the company may be among those to top analysts' earnings expectations in the quarter that ends tomorrow.

Pub Date: 9/30/97

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