Dow scores biggest gain in two months Industrials are up 149.85 as stocks rise broadly, led by drug companies

August 18, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose yesterday, sending the Dow Jones industrial average to its biggest gain in two months, as investors speculated that prices already reflect the economic turmoil in Russia and the Asian recession.

Pfizer Inc., which had dropped 15 percent from its mid-July high, led the gain.

The Dow average rose 149.85, or 1.8 percent, to 8,574.85. On Friday, the 30-stock average closed 9.8 percent below its July 17 record.

The Standard & Poor's 500 index rose 20.92, or 2.0 percent, to 1,083.67. The Nasdaq composite index, which is dominated by other computer-related companies, climbed 27.85, or 1.6 percent, to 1,818.04.

Among other broad indexes, the Russell 2,000 index of small capitalization stocks rose 1.17 to 403.96; the Wilshire 5,000 index increased 151.16 to 10,064.93; the American Stock Exchange composite index gained .63 to 663.27, and the S&P 400 midcap index rose 2.03 to 331.88.

The Sun-Bloomberg Maryland index, which tracks the top 100 Maryland stocks by market valuation, added .58 to 205.00.

Pfizer led a rally in pharmaceuticals stocks, rising $3.4375 to $104.625 after three brokerage analysts reaffirmed "buy" or "strong buy" recommendations for the drug-maker. Merck & Co. rose $3.875 to $131.25, leading the Dow industrials' advance.

Dell Computer Corp. led a rally in personal computer shares, gaining $4.9375 to $110.5625 ahead of its second-quarter earnings report, due out today. The company is expected to report a 53 percent gain in earnings per share.

Hewlett-Packard Co. rose $1.625 to $54.125 in New York Stock Exchange trading as investors bet the company would post better-than-expected earnings after the close. The stock rose to $55.25 in composite trading after the company said it earned 58 cents a share on a diluted basis, the same as last year.

Apple Computer Inc. gained $1.4375 to $41.9375 after retailers said Apple's new iMac home computer sold well in its debut over the weekend. Gateway Inc. climbed $3.3125 to $60.

Micron Technology Inc. rose $2.0625 to $35.25, Applied Materials Inc. gained $2.1875 to $33.3125 and Novellus Systems Inc. rose $3.3125 to $39.6875.

Intel Corp. increased $3.375 to $89.5625 on optimism that growth in more-expensive computer chips is a positive sign for the No. 1 chip maker.

Eight stocks rose for every seven that fell on the New York Stock Exchange, and 76 stocks reached 52-week highs on U.S. exchanges vs. 660 lows.

Volume on the Big Board was lighter than normal, at 582 million shares, indicating that investors didn't pile into the market. Most of the gains came from the largest stocks.

DuPont Co. rose $1.8125 to $55.0625 after a report in the British Financial Mail that the largest U.S. chemical company is in talks to sell its Conoco Inc. oil unit to France's Elf Aquitaine SA for $24 billion. DuPont had planned to spin off Conoco.

Eastern Environmental Services Inc. fell $1.375 to $30.625 after agreeing to sell itself to Waste Management Inc. for $1.3 billion in stock. Waste Management fell $1.3125 to $51.375.

Tiffany & Co. gained $2.0625 to $42.625 after reporting second-quarter earnings of 37 cents a diluted share, up from 29 cents in the same quarter a year ago.

Oil field equipment and services companies fell after Merrill Lynch & Co. cut its earnings estimates for Halliburton Co., Baker Hughes Inc. and BJ Services Co. Merrill analysts Kevin Simpson and Janet Rasmussen said in a report to clients that weak oil prices are hurting oil and gas development activity around the world.

Halliburton dropped $1.25 to $28.75, Baker Hughes fell 6.25 cents to $22.125 and BJ Services was unchanged at $17.

Pub Date: 8/18/98

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