Fed inaction on rates lifts stocks

Dow up 92

Move raises hopes of increased profit

Nasdaq rises 29.99

February 04, 1999|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose yesterday after the Federal Reserve left benchmark lending rates unchanged, raising investors' hopes of higher profit as the economy grows with little inflation.

The Dow Jones industrial average gained 92.69, or 1 percent, to 9,366.81. The Standard & Poor's 500 index rose 10.08, to 1,272.07, and the Nasdaq composite index gained 29.99, or 1.2 percent, to 2,493.41.

Elsewhere on the broad market, the Russell 2,000 index of small-cap stocks added 2.01, to 423.74; the Wilshire 5,000 index jumped 100.30, to 11,689.01; the American Stock Exchange composite index advanced 3.64, to 713.27; and the S&P 400 midcap index rose 5.03, to 378.85.

The Sun-Bloomberg Maryland index of the top 100 Maryland stocks gained 1.15, to 190.20.

Volume on the New York Stock Exchange was 876 million shares, up slightly from Tuesday's 845 million shares.

The dollar rose to 112.90 yen yesterday from 111.97 Tuesday in New York, strengthening against the euro, which slipped to $1.1308, from $1.1351.

The 30-year Treasury bill fell 0.0325, or $3.13 per $1,000 bond, to 99.8125, boosting its yield 1 basis point to 5.25 percent. Yields on two-year notes rose 1 basis point to 4.71 percent.

Online brokerages surged, and Intel Corp. led a rally in semiconductor shares after forming ventures with Mattel Inc. and Analog Devices Inc.

Briefly a billionaire

Siebert Financial Corp. rose $23.50, to $49.50, and owner Muriel Siebert briefly became the latest Internet billionaire when the stock rose above $50. Siebert, the first woman to own a seat on the New York Stock Exchange, owns 92 percent of her firm's shares, according to a November proxy statement.

Ameritrade Holding Corp. climbed $18.25, to $128.5625, and J. B. Oxford Holdings Inc. jumped $7.25, to $12.

America Online Inc. rose $5.6875, to $173.1875, as the No. 1 online service signed a five-year agreement valued at up to $500 million to market credit cards over the Internet for Bank One Corp.'s First USA unit, the largest U.S. provider of MasterCard and Visa cards.

E Trade Group Inc., the third-largest online broker, was the exception, falling $3, to $55.25. The company said its trading system crashed twice yesterday, after it made a change to a software program late Tuesday.

Intel gained $4.0625, to $138.6875, and Mattel added $2.0625, to $27.4375, a day after they announced what they said were the first two products in a line of personal computer-enhanced toys for children.

Analog Devices rose $5.875, to $34, after saying it will work with Intel on new digital signal processors, specialized chips used in everything from cellular phones to computer modems to household appliances.

Yahoo! jumped $35.125, to $358.0625, in the wake of comments from its chief executive officer Tuesday about the outlook for the Internet sector.

Dow component Goodyear Tire & Rubber Co. climbed $1.625, to $52, after confirming an alliance with Japan's Sumitomo Rubber Industries Ltd. and reporting fourth-quarter earnings that matched analysts' expectations. Separately, the company announced a worldwide cost-cutting effort that will eliminate up to 2,800 jobs.

Cisco leads decline

Cisco Systems, the No. 1 computer-networking company, led a decline in computer networking shares. The company disappointed investors when it did not announce a stock split in reporting earnings late Tuesday. Cisco, which is trading at 93 times recent earnings, fell $1.2657, to $111.125.

3Com Corp., the No. 2 network-equipment maker, fell on concern that prices are falling for its products and that it is losing corporate business to larger rival Cisco Systems. 3Com dropped $6.75, to $37.375, in trading of 38.6 million shares, making it the most active stock in U.S. markets.

Perot Systems Corp., the computer services company founded by Texas billionaire Ross Perot, rose $18.375, to $61.875, in its second day of trading. The company sold 6.5 million shares at $16 each and more than doubled in price Tuesday.

Time Warner Inc. rose $2.75, to $64, after the world's biggest media company reported a narrower-than-expected loss of 17 cents a share after the payment of preferred dividends. Time Warner was expected to report a loss of 19 cents a share.

Qualcomm Inc., a maker of cellular phones and network equipment, rose $3.625, to $66.25, after it said it will fire about 700 employees, or 6.3 percent of its work force, and take a $20 million charge. The cuts are expected to save about $20 million this year.

Pub Date: 2/04/99

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