Dow closes up 30.64 in quiet day of trading Nasdaq rises 31.52 as investors return to technology stocks

Wall Street

October 15, 1998|By BRIDGE NEWS

NEW YORK -- The U.S. stock market was carried higher on the back of strong technology, banking and transportation issues yesterday, although the market gave up much of its gains in the last hour of trade on profit-taking.

With third-quarter earnings continuing to pour in, traders remained slightly hesitant and selective, which resulted in a quiet session. However, key market indexes ended the day in the green, with the Dow Jones industrial average up 30.64 points at 7,968.78.

So far, earnings have delivered few bearish surprises, while technology companies have brought some good news to the table. While banks have reported losses due to the rocky global economic situation, traders say these results were already priced into the market, while any good news is seen as a bonus.

The technology-centered Nasdaq composite index rose 31.52, to 1,540.97, as leading technology names continued to meet or beat Wall Street's skeptical profit projections.

Advancing issues outnumbered declines by a 3-to-2 margin on the New York Stock Exchange, where composite volume totaled a hefty 928.79 million shares, up from 862.25 million Tuesday.

The Standard & Poor's 500 rose 10.73, to 1,005.53. The American Stock Exchange composite index rose 5.15, to 583.01, and the Russell 2000 index of small-capitalization stocks rose 4.65, to 324.98. The Wilshire 5,000 index also gained 100.06, to 9,060.46, and the S&P 400 midcap index added 6.10, to 293.24.

Overseas, Tokyo's Nikkei stock average fell 1.3 percent, Frankfurt's DAX index rose 1 percent, London's FT-SE 100 rose 1 percent and Paris' CAC-40 rose 2.5 percent.

The Sun-Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, gained 0.67, to 167.52.

"Buyers are coming in and picking and choosing. There's a lot of money still on the sidelines, but they came in to buy some quality names and they took the rest of the market with them," said Michael Lyons, a trader at Morgan Stanley Dean Witter.

The Dow started the day lower but soon reversed itself and spent the rest of the day on higher ground. At one point the Dow showed gains of 110 points.

Technology stocks were strong throughout the day, largely on the back of friendly earnings reports. The Nasdaq showed a 2.1 percent gain compared with the 1.1 percent gain of the S&P 500.

Compaq Computer reported third-quarter earnings at 7 cents per share, beating First Call's 6-cent estimate. Compaq shares ended up 93.75 cents at $25.4375.

Apple Computer added support later in the day as it reported fourth-quarter earnings of 68 cents per share, up from First Call's 49-cent estimate. However, because the report was hyped up to be above estimates, the market sold off the stock late in the day, with Apple ending down $1.375 at $37.375.

Moneycenter banks made up another one of the stronger sectors despite the hedge-fund fears that continue to dog these stocks.

Traders said layoffs by Merrill Lynch, Citigroup, and Bank Boston along with expectations that other large institutions may follow suit, is turning out to be supportive for these stocks as it shows companies are taking the economic problems seriously.

JP Morgan was up $1.5625 at $86.625 with American Express up $2.375 at $80.875.

BankAmerica was a dark spot on the banking sector as it reported third-quarter earnings at 50 cents per share, falling short of First Call's 90-cent estimate. BankAmerica also reported $400 million in hedge fund exposure. Shares were down $5.875 at $48.0625.

Transportation stocks continue to bounce back after a rough ride in the past few weeks. Delta Airlines was up $2.3125 at $86.50 with AMR Corp up $2.125 at $50.125.

Pub Date: 10/15/98

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