Stocks rise as profits run with the bulls Goldman Sachs leads way as financial firms, indexes post record finishes

March 25, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose yesterday, led by financial companies such as Merrill Lynch & Co. as record earnings from Goldman Sachs Group LP showed that the bull market is boosting profits on Wall Street.

The Dow Jones industrial average rose 88.19 to 8,904.44, recovering most of Monday's loss and closing 2 points from a record.

The Standard & Poor's 500 index rose 10.10 to a record 1,105.65. The Nasdaq composite index rallied 19.93 to a record 1,812.44.

Other broad market indexes set records as well. The Russell 2,000 index of small company stocks rose 2.30 to 476.26; the Wilshire 5,000 index of stocks on the New York, American and Nasdaq exchanges climbed 82.81 to 10,507.21; the American Stock Exchange composite index gained 3.42 to a record 738.69; and the S&P 400 midcap index added 2.77 to 368.58. The NYSE composite index rose 4.42 to a record 574.96.

The Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, rose 0.08 to 236.14.

Advancing issues outnumbered declining ones by a 3-to-2 ratio on the New York Stock Exchange, where volume totaled 614.25 million shares, down from 629.7 million yesterday.

Financial stocks rose after Goldman Sachs, Wall Street's richest investment banking partnership, said first-quarter pretax earnings rose 13 percent to a record as trading, bond underwriting and fees from advising on takeovers surged. The 128-year-old securities firm said earnings before taxes rose to $1.02 billion for the three months ended in February, from $905 million in the year-earlier quarter.

Merrill Lynch rose $3.9375 to $86.8125; Lehman Brothers Holdings Inc. rose $2.0625 to $73.25; and Morgan Stanley, Dean Witter, Discover & Co. rose $1.9375 to $76.6875. Lehman and Morgan Stanley are to report first-quarter earnings this week, and analysts expect banner profits.

Walt Disney Co. was the biggest gainer in the Dow, jumping $4.3125 to $107.0625 after several analysts told investors to ignore an article in Barron's that drove the stock down $4 on Monday.

Cisco Systems Inc. rose $3.0625 to $67.8125 after Chief Executive John Chambers said Internet service and voice and data business could account for half the company's sales within four years.

Cisco also got a boost from Netscape Communications Corp. choosing one of its switch routers to provide faster access to Web pages. About 80 percent of the traffic on the Internet is carried by Cisco routers and switches.

AT&T Corp. rose $1.5625 to $67.50, an all-time high, after Telecom Italia SpA said its talks with the U.S. company on creating an international telecommunications alliance are proceeding without difficulties.

Apple Computer Inc. rose $1.875 to $28 on speculation that its board will pressure interim Chief Executive Steve Jobs to stay on permanently as CEO or make room for a new leader.

Sun Microsystems Inc. rose 87.5 cents to $44.875 on a report the computer workstation company will license its Java programming language to Ericsson AB for use in cellular telephones. A licensing agreement with Sony Corp. and a development agreement with International Business Machines Corp. are on the way, the New York Times reported.

Atlanta-based ISS Group Inc., an as-yet-unprofitable network security company, surged $18.375 to $40.375 in its first day of trading, reflecting investor enthusiasm for Internet-related initial public offerings of stock.

Quantum Corp. rose 62.5 cents to $21.125, even after the disk-drive maker warned that earnings for its fiscal fourth quarter will be lower than expected because of falling prices and weak demand. Seagate Technology Inc., another disk-drive maker, rose $1.5625 to $24.9375.

Tele-Communications Inc. rose 68.75 cents to $32.5625 after the nation's No. 2 cable company said it lost $392 million in the fourth quarter, compared with net income of $722 million a year earlier. The company's cable unit had a 41 percent gain in cash flow and 155,000 new subscribers.

Oil producers' stocks fell amid doubts that oil exporters will honor production-cutting commitments that sent oil soaring Monday. Chevron Corp. dropped $1.625 to $85.4375.

Bristol Hotel Co. fell $1.375 to $26.25 after Felcor Suite Hotels Inc. agreed to buy its hotel properties for about $1.9 billion in stock and assumed debt, making Felcor the largest owner of Holiday Inns. Some analysts were disappointed with the price. Felcor fell 56.25 cents to $35.5625.

Pub Date: 3/25/98

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