Sales, inflation data help boost stocks Investors think borrowing costs will stay low

Dow posts record close

Wall Street

May 14, 1998|By BLOOMBERG NEWS

NEW YORK -- Many U.S. stocks gained yesterday as reports on inflation and retail sales boosted optimism that borrowing costs will stay low, helping corporate profit growth.

The Dow Jones industrial average rose 50.07 to close at a record 9,211.84, pushing its gain for the year to 17 percent. The Standard & Poor's 500 index gained 3.07 to 1,118.86 and the Nasdaq composite index gained 6.02 to 1,866.18.

Microsoft Corp. led the Nasdaq higher, rising $1.25 to $86.9375 on investor optimism that the company's Windows 98 software will ship on time tomorrow after a favorable appeals court ruling earlier this week.

The ruling blocked only one legal avenue of attack for the government in its antitrust fight with Microsoft, but it boosted computer and software companies that plan to introduce new products to coincide with the release of Windows 98. Dell Computer Corp. jumped $3.875 to $98.25; Intuit Inc. rose 59.375 cents to $49.875; PeopleSoft Inc. gained 68.75 cents to $46.375.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks rose 1.35 to 477.48; the Wilshire 5,000 index gained 19.76 to 10,622.47; the American Stock Exchange composite index slid 0.59 to 742.99; and the S&P 400 midcap index lost 0.10 to 372.69.

The Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, rose 0.38 to 239.83.

Some eight stocks rose for every seven that fell on the New York Stock Exchange, where about 602 million shares traded.

Auto stocks gained amid speculation that Daimler-Benz AG's $41.5 billion acquisition of Chrysler Corp. might accelerate an industry shakeout that's already under way. General Motors Corp. led the Dow industrials higher, climbing $1.9375 to $75.0625. Ford Motor Co. rose $2.4375 to $48.1875.

Motorola Inc. gained $3.50 to $59.375 on speculation that Germany's Siemens AG may make an offer to buy all or part of the world's largest maker of wireless phones. Siemens said it wasn't interested in acquiring Motorola.

Bay Networks Inc. rose $3.9375 to $27.9375. The maker of computer-networking equipment told analysts that it rejected an acquisition offer from Northern Telecom Ltd. as too low, but would consider higher bids from Nortel or other suitors.

Marriott International Inc. shares rose 8.6 percent on optimism that new franchise fees and management contracts will continue to boost its earnings and that the company will buy back stock. Shares of the Washington-based hotel company rose 2.625 to $33.125 in trading of 1.44 million, almost three times its daily average of 533,700 for the 1 1/2 months since Marriott spun off its hotels from its food-service business.

Callaway Golf Co. fell $2.25 to $20.625, extending Tuesday's $1.875 drop. After the close of trading Tuesday, the maker of golf clubs and apparel said currency turmoil in Asia and increased price competition could cut its second-quarter earnings to about 50 percent below analysts' estimates.

The yield on the benchmark 30-year Treasury bond fell to 5.94 percent from 5.97 percent Tuesday.

Political protests in Indonesia helped drive currencies and shares lower throughout Asia, adding to concern that loans by U.S. banks in the region may not be repaid. Citicorp fell $1.625 to $150.50; Chase Manhattan Corp. dropped $1 to $139.50; BankAmerica Corp. fell $1.1875 to $83.8125; and Bankers Trust Corp. fell $1.5625 to $128.5625.

Shares of securities companies who raise money and trade stocks based in Asia also fell. Merrill Lynch & Co. dropped 37.5 cents to $86.4375; Morgan Stanley, Dean Witter & Co. fell 81.25 cents to $74.6875; Donaldson, Lufkin & Jenrette Inc. dropped $1.50 to $44.4375; and Bear Stearns Cos. fell $1 to $54.

Yesterday's most active stocks in U.S. trading were Dell Computer Corp., C-Phone Corp., Microsoft, Bay Networks and Applied Materials Inc.

Pub Date: 5/14/98

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