Stocks scamper higher again Computer issues lead the way

Dow rises 139 points

August 19, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose yesterday for a second straight day, led by computer-related companies such as Microsoft Corp., on optimism that share prices had fallen more in the past month than was justified by the outlook for corporate earnings.

The Dow Jones industrial average rose 139.80, or 1.6 percent, to 8,714.65. The 30-stock average added 289 points Monday and yesterday, its biggest two-day jump this year.

The Standard & Poor's 500 index rose 17.53, or 1.6 percent, to 1,101.20. The Nasdaq composite index gained 37.08, or 2.0 percent, to 1,855.12.

Microsoft rose 4 percent, leading the S&P 500 higher. Compaq Computer Corp., Cisco Systems Inc. and Intel Corp. gained as investors speculated that those companies will withstand global economic turmoil.

Microsoft gained $3.9375 to $111; Compaq rose $2.375 to $37.375;, Cisco rose $2.0625 to $100.1875; and Intel rallied $1.875 to $91.4375.

Among other broad indexes, the Russell 2,000 index of small stocks rose 7.33, or 1.8 percent, to 411.29; the Wilshire 5,000 index gained 155.56, or 1.55 percent, to 10,220.49; the American Stock Exchange composite index jumped 6.75, or 1.0 percent, to 670.02; the New York Stock Exchange composite index rose 8.04, or 1.5 percent, to 552.03; and the S&P 400 midcap index added 1.06 to 380.67.

The Sun-Bloomberg Maryland index, which tracks the top 100 Maryland stocks by market valuation, gained 1.78 to 206.78.

Advancing stocks outnumbered decliners by a 2-to-1 ratio on the New York Stock Exchange.

Tame inflation, as shown by yesterday's report on consumer prices, low interest rates and steady U.S. growth, will boost earnings and share prices in coming months, bullish analysts said. Federal Reserve policy-makers kept short-term interest rates unchanged when they met yesterday.

Dell Computer Corp. rose $5.6875 to $116.25 after the close of trading on U.S. exchanges on news of better-than-expected earnings. The world's third-biggest PC maker reported fiscal second-quarter profit of 50 cents a share, beating analyst expectations of 46 cents, and up from 30 cents in the year-earlier quarter.

Other computer companies gained. Hewlett-Packard rose $1.75 to $57, a day after its third-quarter earnings beat analysts'

forecasts. International Business Machines Corp. gained 3.75 to $128.875.

Sears, Roebuck & Co. rose $3.6875 to $52.75 after it agreed to sell its Western Auto Supply car-parts chain to Advance Auto Parts for $175 million and a 40 percent stake in the closely held retailer.

Spyglass Inc. rose $1.6875 to $12.9375 on optimism that its turnaround is on track after Motorola Inc. licensed Spyglass's technology for putting Internet browsers in cell phones and other devices.

Home Depot Inc. rose $2 to $44.8125 after the largest U.S. retailer of home-improvement supplies said fiscal second-quarter profit rose 30 percent, about as expected. Strong home sales boosted demand for bathroom fixtures, tools, wallpaper and plants, the company said.

Entrust Technologies Inc., a majority-owned unit of Canadian phone-equipment maker Northern Telecom Ltd., rose $4 to $20 in its first day of trading. Entrust and selling shareholders sold 7.77 million shares -- 700,000 more than planned -- at $16 each. Entrust makes products and provides services that allow companies to conduct secure communications and commerce over computer networks.

Among banks, Chase Manhattan Corp. rose $2.6875 to $69.1875; Citicorp gained $3.1875 to $146.9375; and J. P. Morgan & Co. rose 43.75 cents to $127.625.

Markets abroad also rose. Benchmark indexes in Britain, France and Germany all climbed more than 3 percent. Japan's Nikkei 225 index jumped 1.8 percent.

Pub Date: 8/19/98

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