Market up for 3rd day as Internet stocks rise Nasdaq sets record, Dow hits 8,988 as computer, networking issues rally

Wall Street

December 22, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose for a third day yesterday, as Internet shares fueled a rally in computer and networking issues. The Standard & Poor's 500 index topped 1,200 for the first time, and the Nasdaq composite index set a record.

America Online Inc., Amazon.com Inc. and Onsale Inc. soared after a Morgan Stanley Dean Witter & Co. analyst made bullish comments on Internet companies.

The Dow Jones industrial average rose 85.22, or 1 percent, to 8,988.85, 4 percent below its Nov. 23 record. The Nasdaq composite index climbed 51.89, or 2.5 percent, to 2,138.03, topping the record it set Friday, and the S&P 500 gained 14.81, or 1.3 percent, to 1,202.84, breaking its Nov. 27 record.

The Russell 2,000 index of small-capitalization stocks rose 4.41, to 401.83; the Wilshire 5,000 index jumped 137.72, to 10,956.28; the American Stock Exchange composite index advanced 2.87, to 654.12; and the S&P 400 midcap index added 6.65, to 361.04.

The Sun-Bloomberg Maryland index of the top 100 Maryland stocks gained 1.76, to 190.43.

Seventeen stocks rose for every 13 that fell on the New York Stock Exchange. More than 744 million shares changed hands on the Big Board.

Five of the 30 Dow industrials -- AT&T Corp., International Business Machines Corp., General Electric Co., Wal-Mart Stores Inc. and McDonald's Corp. -- rose to records.

Amgen Inc. soared $12.1875, to $100.3125. The world's No. 1 biotechnology company said it won all rights to a once-a-week version of its anemia drug Epogen in an arbitration battle with Johnson & Johnson. J & J dropped $2.625, to $76.875, taking 11 points off the Dow average.

Internet stocks surged after Mary Meeker, who follows the industry for Morgan Stanley Dean Witter & Co., told Barron's that the increase of Internet users to 80 million yesterday from 5 million in 1995 makes Internet stocks such as America Online, Yahoo! Inc. and Amazon.com good bets in the stock market. AOL gained $12.25, to $116.50; Yahoo! climbed $34.9375, to $247.25; and Amazon soared $32.0625, to $318.75.

Companies that provide the hardware for the Internet also surged. Cisco Systems Inc., which makes the switches and routers that link computers into networks, rose $4.25, to a record $94.6875, and Dell Computer Corp. gained $4.0625, to $71.9375. AOL gained after Dell, the top direct seller of personal computers, said it will use AOL's online service as the default Internet provider on its consumer computers sold in the United States and Canada.

Onsale, an Internet auctioneer, surged $24.3125, to $68, after saying it will provide pricing information to Yahoo!'s small-business World Wide Web site.

Charles Schwab Corp., the largest online brokerage, surged $7.3125, to $51.6875, its second-biggest gain ever. E Trade Group Inc., No. 2 in the business, jumped $4.1875, to $32.125. Morgan Stanley, owner of Discover Brokerage Direct, jumped $4.9375, to $76.5625. Knight/Trimark Group Inc., a market maker in Nasdaq securities, rose $1.75, to $16.625.

Among phone companies, SBC Communications Inc. jumped $3.25, to $53.25; Ameritech Corp. gained $3.1875, to $61.125; BellSouth Corp. rose $1.8125, to $88.8125; US West Inc. added $2.625, to $63.9375, and Bell Atlantic Corp. grew $1.875, to $58.625. All five stocks touched 52-week highs.

LeaRonal Inc. jumped $6.875, to $33.6875, after the maker of chemicals for the electronics industry agreed to be acquired by Rohm and Haas Co., a specialty chemical company, for $34 a share, or about $460 million, in cash. That's a 27 percent premium to Friday's closing price. Rohm & Haas gained $1, to $29.625.

Gencor Industries Inc. fell $1.6875, to $8.5625, after the heavy-machinery maker for construction and agriculture businesses warned investors to expect weaker earnings next year.

Pub Date: 12/22/98

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