Stocks climb to records once again Dow industrials rise 9, ending week at 9,337

computer issues strong

July 18, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks advanced to records yesterday, closing out a week of milestones, as better-than-expected earnings reports offset the drag on some companies from Asia's recession. EMC Corp. and Sun Microsystems Inc. led a rally in computer shares.

The Dow Jones industrial average rose 9.78 to 9,337.97, and the Standard & Poor's 500 index gained 2.76 to 1186.75, topping the records they set Thursday. The Nasdaq composite index gained 8.20 to 2,008.76, its eighth straight record.

It was the third time this week that the Dow, S&P 500 and Nasdaq set records on the same day. The week's surge sent the Dow up 2.5 percent, past 9,300. The S&P 500 advanced 1.9 percent.

The Nasdaq, which crossed the 2,000 milestone Thursday, gained 3.3 percent on the week.

Among other broad indexes, the Wilshire 5,000 index jumped 19.41 to 11,106.10 yesterday; the American Stock Exchange composite index gained 4.42 to 736.23; and the S&P 400 midcap index added .47 to 374.70; but the Russell 2,000 index of small capitalization stocks fell 1.28 to 462.36.

The Sun-Bloomberg Maryland index, which tracks the top 100 Maryland stocks by market valuation, gained .48 to 235.07, finishing the week up 1.52 percent.

The benchmark 30-year U.S. Treasury bond yielded 5.74 percent yesterday, up 2 basis points from Thursday but still near historic lows.

International Business Machines Corp., Travelers Group Inc. and Boeing Co. all rose ahead of their earnings reports next week. IBM rose $1.8125 to $120.1875; Travelers gained 75 cents to $71.6875; and Boeing rose $1.25 to $50.

EMC, the world's largest maker of computer data-storage systems, led computer shares higher, rising $4.1875 to a record $52.4375 after topping estimates with a 47 percent increase in second-quarter profit.

Sun Microsystems Inc., the largest maker of computer workstations, rose $2.0625 to $52 after reporting a 21 percent increase in profit. Strong U.S. sales offset a slowdown in Japan.

Nasdaq's stalwarts stampeded to highs.

Microsoft Corp., the world's largest software company, rose 56.25 cents to $117.9375, after reporting better-than-expected earnings. Dell Computer Corp., which has almost tripled this year, climbed $3.8125 to $117.5625, the eighth straight gain for the fast-growing direct computer seller.

Cisco Systems Inc., up 79 percent this year, rallied $4 to a record $99.75. Tellabs Inc. gained $1.9375 to a record $86.6875. On Thursday, Tellabs said its quarterly profit surged 47 percent amid strong demand for its equipment, which directs traffic on phone networks.

PepsiCo Inc. rose $1.5625 to $39.50, its first gain all week, after the soda and snack food company said net income rose 19 percent, topping forecasts.

Even as the major indexes gained, declining stocks outnumbered advancers by a 15-to-14 ratio on the New York Stock Exchange.

Gillette Co. fell $2 to $58.375. The world's No. 4 consumer products company reported that second-quarter earnings rose 11 percent, matching estimates, but a subsequent conference call caused analysts to downgrade the stock and cut earnings estimates.

Northrop Grumman Corp. tumbled $6.75 to $90.625 after Lockheed Martin Corp. scrapped its planned $10.7 billion purchase of the defense electronics company to avoid a prolonged legal battle with the federal government. Northrop fell every day this week, losing 16 percent of its value.

Triton Energy Ltd. fell $9.875 to $20.625 after the Dallas-based oil exploration company failed to announce its sale, as expected, and its chief executive quit amid company plans to write off $160 million. Triton put itself up for sale in March.

Pub Date: 7/18/98

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