Computer shares lead slight rise in stocks IBM accounts for half of Dow's 26.78-point gain

Dell reaches all-time high

September 26, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks mostly rose yesterday, as optimism that the Federal Reserve will cut interest rates next week offset ,, concern that banks will report more losses on hedge fund investments. Dell Computer Corp. and other computer shares led the gains.

The Dow Jones industrial average climbed 26.78 to 8,028.77; the Standard & Poor's 500 index gained 2.03 to 1,044.75; and the Nasdaq composite index rose 23.25 to 1,743.59.

The Wilshire 5,000 index also gained, rising 9.74 to 9,575, but other broad indexes fell. Among them, the Russell 2,000 index, a benchmark of small capitalization stocks, slid 1.23 to 369.02; the American Stock Exchange composite index lost 2.31 to 639.99; and the New York Stock Exchange composite index fell 0.91 to 515.68.

The Sun-Bloomberg Maryland index of the top 100 Maryland stocks gained 1.43 to 186.79.

Declining shares outnumbered advancers by 17 to 13 on the NYSE.

For the week, the Dow gained 1.7 percent, the S&P 500 rose 2.4 percent and the Nasdaq added 4.8 percent. The NYSE composite rose 0.2 percent for the week, the Amex composite 2.0 percent and the Russell 2,000 1.6 percent.

About 724 million shares changed hands on the NYSE yesterday, compared with a three-month daily average of 707 million.

Dell rose $2.75 to an all-time high of $66.0625 after executives of the biggest direct-seller of personal computers said the economic slump in Asia won't impede sales growth. International Business Machines Corp. rose $3 to $133.5625, accounting for almost half of the Dow's gain.

Oil and natural gas producers advanced as Hurricane Georges threatened to disrupt shipping and production in the Gulf of Mexico. Chevron Corp. rose $1.1875 to $83.375 and Mobil Corp. gained 93.75 cents to $77.625.

Chase Manhattan Corp., the largest U.S. bank, fell 87.5 cents to $45.50. First Chicago NBD Corp. lost $1.9375 to $71.75. Lehman Brothers cut its ratings on Chase, Bankers Trust, Citicorp, J.P. Morgan & Co. and Banc One Corp. early yesterday.

J.P. Morgan rose $1.9375 to $88.9375, after diving $6.125 Thursday. The Wall Street Journal reported that J.P. Morgan had covered its exposure to Long-Term Capital Management LP through Treasury bills and cash.

BankAmerica Corp. rose $2.50 to $62.50 after Merrill Lynch & Co. raised its investment rating on the stock. Citicorp, the No. 2 U.S. bank, gained 75 cents to $100.625.

Merck & Co. slumped $5.625 to $131.50 after rival Bristol-Myers Squibb Co. said early tests suggest its experimental AIDS drug could be effective when taken once a day. Bristol-Myers rose 68.75 cents to $100.625.

Coca-Cola Co. fell 43.75 cents to $56.25. The company, which earns three-quarters of its profit abroad, has seen its shares drop 16 percent this year.

Micron Technology Inc. gained $2.75 to $33.75 after Electronic Buyer's News, citing anonymous sources, reported that Intel Corp. is negotiating to buy a minority stake in the largest maker of computer memory chips. Intel gained $3 to $88.3125.

In composite trading, 450 stocks fell to 52-week lows, while 70 reached highs for the period.

Among those setting 52-week lows was chemicals and ammunition maker Olin Corp., which tumbled $2.625 to $26.25 after warning that it will miss earnings estimates because of a slowdown in Asian sales.

Glaxo Wellcome PLC's American depositary receipts fell $2.9375 $57.75. The maker of AIDS, asthma and migraine drugs could face difficult markets for some of its newer products, said Goldman, Sachs & Co. analyst John Murphy, who downgraded the stock to "hold" from "buy."

Major indexes swung between gains and losses throughout the day. Much of the volatility came from five computer-guided buy programs and three sell programs, according to Birinyi Associates Inc., a Greenwich, Conn., research firm. The programs had the net effect of adding 142.07 points to the Dow, Birinyi said.

The New York Stock Exchange imposed limits on index arbitrage trading four times. The rule is supposed to slow market advances or declines. It forces traders to wait until shares move in the opposite direction before taking advantage of price differences between equity index futures traded in Chicago and the underlying stocks traded in New York.

Pub Date: 9/26/98

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