Smaller stocks lead rally Russell 2,000 leaps 2.3% while Dow industrials saunter 20 points higher

Wall Street

August 08, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose yesterday, as investors who sold richly valued large stocks this week moved money into small and midsize companies.

The small-stock Russell 2,000 index extended Thursday's rise, soaring 9.18, or 2.3 percent, to 415.80. The Russell's gains were led by little-known names such as PMC-Sierra Inc., a maker of parts for computer networks, up $3.625 to $36.25.

The Standard & Poor's 400 midcap index rose 5.85, or 1.8 percent, to 340.84, led by software and oil drilling stocks such as Network Associates Inc. and EVI Weatherford Inc.

The Dow Jones industrial average eked out a gain of 20.34 to 8,598.02.

Dragged down by BellSouth Corp. and other regional telephone shares, the S&P 500 index fell 0.18 to 1,089.45. The index's three biggest stocks -- General Electric Co., Microsoft Corp. and Coca-Cola Co. -- all declined.

The Nasdaq composite index rose 17.26 to 1,846.77. Retailer Costco Cos. and makers of computer networking and telecommunications equipment, such as 3Com Corp. and Tellabs Inc., led the gains. Intel Corp. and Cisco Sytems Inc., among the Nasdaq's biggest stocks, fell along with Microsoft.

The New York Stock Exchange composite index rose 1.70 to 549.50 and the American Stock Exchange composite index gained 7.12 to 684.07.

Advancing stocks outnumbered decliners for a second day on the New York Stock Exchange, as two stocks rose for every one that fell. Some 759 million shares changed hands, capping the second-busiest week in Big Board history.

In the three sessions since Tuesday's decline, the Russell gained 4.3 percent, the S&P 500 1.6 percent, the Dow industrial average 1.3 percent and the Nasdaq 3.4 percent.

Still, it was a losing week. The Dow industrials lost 3.2 percent, failing in three days of gains to make up all the ground lost in their 299-point plunge Tuesday. The S&P 500 fell 2.7 percent during the week and the Nasdaq composite fell 1.3 percent. The Russell 2,000 fell 1.1 percent and the S&P midcap fell 1.4 percent.

At its mid-July high, the 30-stock Dow average had returned 19 percent for the year, the S&P 500 23 percent and the Nasdaq composite 28 percent.

Regional phone stocks fell yesterday amid strike concerns as BellSouth Corp., Bell Atlantic Corp., Southern New England Telecommunications Corp. and U S West Inc. negotiate with the Communications Workers of America, which represents 163,000 employees at the four companies, and the International Brotherhood of Electrical Workers, which has thousands more. Contracts at the first three companies expire tonight, and a week from today at U S West.

BellSouth fell $2.50 to $65; Bell Atlantic lost $1.1875 to $42.125; .. and U S West dropped 93.75 cents to $50.6875. Southern New England fell $2 to $67.25, though it recouped some of its loss when it announced a tentative contract settlement.

Exxon Corp. rose $2 to $66.9375, Royal Dutch Petroleum Co. rallied $3.0625 to $48.75 and Global Marine Inc. rose $1 to $14.125.

Electronic Data Systems Corp. gained $5.125 to $41.8125 after chief executive Les Alberthal resigned. Investors cheered the departure, adding almost $2 billion to the company's market capitalization in about an hour.

Advanced Micro Devices Inc. added $1.25 to $18, C-Cube Microsystems Inc. rose $1.125 to $17.8125 and Alliance Semiconductor Corp. gained 40.625 cents, or 15 percent, to $3.0938.

Intel, the world's biggest chip maker, fell 31.25 cents to $86.6875.

Unilever NV, Europe's largest consumer-goods company, fell $2 to $64.9375 in New York after reporting stagnant second-quarter profit and said it's concerned that Asia's economic problems are hurting its business. Unilever's comments echoed Procter & Gamble Co.'s warning last week.

Pub Date: 8/08/98

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