Yahoo!, other Web stocks fuel market rise

Nasdaq is up 3.1 points as it closes week with biggest gain since January

April 02, 1999|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose yesterday, as Yahoo! Inc.'s $5.7 billion acquisition of Broadcast.com Inc. spurred expectations for consolidation in the online industry.

SBC Communications Inc. and other telephone companies gained on optimism that the Internet's growth will boost demand for data transmission.

The Dow Jones industrial average gained 46.35, to 9,832.51, after being little changed for much of the day. Stocks got a boost late in the session from computer-guided buy programs.

The Standard & Poor's 500 index rose 7.35 to 1,293.72, and the Nasdaq composite index, packed with Internet stocks, climbed 31.97, to 2,493.37.

Elsewhere on the broad market, the Russell 2,000 index, a benchmark of small-cap stocks, rose 1.11, to 398.74; the Wilshire 5,000 index rose 61.18, to 11,768 85; the American Stock Exchange composite index advanced 1.00, to 711.30; and the S&P 400 midcap index added 0.58, to 366.68.

The Sun-Bloomberg Maryland index of the top 100 Maryland stocks gained 1.17, to 178.29.

Advancers and decliners were about evenly matched on the New York Stock Exchange, where about 705.7 million shares changed hands.

The Dow added just 9.99 points during a week shortened by the Good Friday holiday and after closing above 10,000 for the first time Monday; the Nasdaq composite rose 3.1 percent, its biggest weekly gain since the end of January; and the S&P 500 gained 0.9 percent.

Broadcast.com rose $11.8125, to $130, and Yahoo! advanced $11.375, to $179.75.

Their deal spurred a rise in Internet shares, as analysts said it could make other companies that help transmit multimedia content the targets for Web directory giants seeking to bolster their sites with audio and video entertainment.

InterVU Inc., which helps corporate Web sites transmit big video and audio events, soared $15.125, to $59.50.

RealNetworks Inc., which makes software that lets users send and receive sound and video over the Internet, rose $35.6875, to $157.875.

America Online rose $3, to $150, and was the most active stock in U.S. trading, with 22.1 million shares changing hands.

Since joining the S&P 500 just three months ago, AOL has become the 12th-most valuable stock in the index. It's still the index's only Internet company.

Telephone stocks gained, leading the S&P 500's advancers, after analyst Blake Bath at Lehman Brothers Inc. said strong growth in the data business will compensate for offset competitive pricing and regulatory uncertainty. He raised his rating on SBC to "buy" from "neutral."

SBC rose $2.50, to $49.6875; Ameritech Corp. rose $2.635, to $60.25; and BellSouth Corp. rose $1.1875, to $41.25.

American Express Co. gained $3.50, to $121.25, contributing most to the Dow's advance, after Athina Meehan, a Morgan Stanley Dean Witter analyst, said earnings at the world's biggest charge-card issuer will rise as it issues more cards overseas. She has a "strong buy" rating on the stock.

Speculation of a takeover drove Lam Research Corp. up $4.8125, to $33.8125. Analyst Mark Fitzgerald at Merrill Lynch & Co. said Novellus Systems Inc. may buy the maker of semiconductor processing equipment. Novellus rose $3.50, to $58.625.

Silicon Graphics Inc. fell $3.5625, to $13, after the computer maker said it expects to post a loss of 27 cents to 32 cents a share for its third quarter that ended Wednesday, about four times predictions.

Atlantic Richfield Co. fell 68.75 cents, to $72.4375, after BP Amoco PLC, the world's third-biggest publicly traded oil company, agreed to pay $26.8 billion in stock, or about $83 a share, for the company. The combined company would be the largest U.S. oil refiner and oil producer.

King World Productions Inc. added 56.25 cents, to $31.125, after CBS Corp. agreed to buy the No. 1 TV syndication company, for more than $2.5 billion in stock. CBS, owner of the No. 1 U.S. network, fell 75 cents, to $40.0625.

PeopleSoft Inc., the No. 2 business-management software maker, said first-quarter revenue will fall well short of its previous estimate, and its shares fell 25 cents, to $14.375, the lowest level in three years. Oracle Corp. fell 56.25 cents, to $25.8125.

Computer Sciences Corp. lost $1.375, to $53.8125, and Autodesk Inc. dropped $3.25, to $37.1875.

Pub Date: 4/02/99

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