U.S. stocks climb for 4th time in 5 days Solid performance by Sun Microsystems boosts optimism

January 17, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose for the fourth time in five days yesterday, as better-than-forecast earnings from Sun Microsystems Inc. spurred optimism that computer-related shares will continue their rebound.

Rising stock markets across Asia and Europe also gave U.S. shares a boost, traders said.

Sun Microsystems joined Intel Corp. and Motorola Inc. among large computer-related companies to report this week that profits largely were unaffected by the Asian economic crisis.

The Dow Jones industrial average rose 61.78 to 7,753.55. Earlier, the 30-stock average rose 111.35 before a monthly expiration of equity and index options caused it to retreat. The Dow rose 2.3 percent for the week, recouping about half of last week's slide -- its worst in eight years.

The Standard & Poor's 500 index rose 10.78 to 961.51, recording a 3.6 percent weekly gain. The Nasdaq composite index rose 15.82 to 1,562.88, climbing 4.0 percent for the week.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks jumped 4.50 to 426.25; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, climbed 102.63 to 9,182.38; the American Stock Exchange composite index added 8.45 to 663.99; and the S&P 400 midcap index gained 3.33 to 322.07.

On the New York Stock Exchange, 2,133 stocks rose and 854 fell, as 670 million shares changed hands on the Big Board, 15 percent above the three-month daily average.

Sun Microsystems rose $2.0625 to $45.125. Analysts at PaineWebber Inc. and Merrill Lynch & Co. boosted their investment recommendations to "buy."

The company said its fiscal second-quarter profit rose 25 percent, spurred by strong sales of its high-performance servers and storage devices.

Ascend Communications Inc. rose $1.125 to $30.0625; Microsoft Corp. jumped $2.9375 to $135.25; International Business Machines Corp. gained $1.5625 to $105; Compaq Computer Corp. rose $1.0625 to $59.125; and Dell Computer Corp. jumped $1.125 to $92.75.

Seagate Technology Inc., the world's largest independent maker computer disk drives, was an exception, falling $1.125 to $18.50. The company plans to cut 10,000 jobs.

Microchip Technology Inc. slumped $5.875 to $21.875. The computer-chip maker's fiscal third-quarter earnings lagged behind estimates because of a slowdown in Asian sales.

The Morgan Stanley high-tech index rose 1.36 to 443.81 and gained 5 percent for the week. The index of computer-related shares is up 98 percent in three years; the S&P 500 climbed 99 percent during that span.

Rising overseas markets eased concerns that Asia's economic slowdown will crimp demand for stocks around the world. Hong Kong's Hang Seng index rose 3.7 percent, and Japan's Nikkei 225 index rose 6.1 percent. In Europe, Britain's FT-SE 100 index rose 1.9 percent, France's CAC 40 index gained 1.5 percent and Germany's DAX Ibis index climbed 1.8 percent.

The rallies overseas helped the American depositary receipts of Japanese and certain European companies gain. Sony Corp. jumped $4.875 to $94.6875; Honda Motor Co. climbed $4.125 to $76.25; Hitachi Ltd. added $5.1875 to $77.125; Barclays PLC rose $4 to $114.50; and British Telecommunications PLC added $3.75 to $89.50.

Regal Cinemas Inc. surged $4.0625 to $31.1875 before trading was halted. Kohlberg Kravis Roberts & Co. is in talks to buy the movie theater operator in a transaction valued at more than $1 billion, people familiar with the negotiations said.

Nordstrom Inc. tumbled $4.625 to $44.875 after the company told investors that fiscal fourth-quarter earnings won't meet estimates because of slower-than-expected holiday sales and steeper markdowns.

Pub Date: 1/17/98

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