Small stocks reach record high, but Dow falls 1.08


NEW YORK -- Stock prices closed mixed yesterday, as a spectacular fourth-quarter earnings report from Intel drove the NASDAQ index of smaller stocks to its second record high this week.

A brief U.S.-led air strike against Iraqi missile sites fueled rallies in defense and oil stocks but otherwise had little effect on the stock market.

The Dow Jones industrial average fell 1.08, to 3,263, with International Paper, Alcoa and Philip Morris leading the decline.

The Standard & Poor's 500 gained 1.99, to 433.03.

The NASDAQ index shot up 7.33, to a record closing high of 686.78, surpassing the previous high of 682.40, set Monday. Better-than-expected earnings from Intel and Adobe Systems led the advance.

"Demand for personal computers is extraordinary across the board, and the shift into the 486 [microprocessor from Intel] is extremely rapid," said Larry Bowman, who manages the Fidelity Emerging Growth Fund.

So long as the NASDAQ market soars at a hellbent pace, mutual fund managers "cannot afford to be underweighted in Intel," Mr. Bowman said. "Technology is a leadership segment within the market, and Intel is the leadership stock within technology."

The stock market showed little reaction to reports that the United States and its allies had bombed missile sites in southern Iraq.

Advancing stocks outnumbered declining issues by a margin of 9-to-6 on the New York Stock Exchange. Trading was active, with 246 million shares changing hands.

Intel soared $8.125, to an all-time high of $110.125, on volume of 10.9 million shares. The company said it earned $1.97 a share in the fourth quarter, up from 90 cents a year ago and well above the most optimistic forecasts. Wall Street analysts raised their 1993 earnings estimates for Intel to as high as $10 a share.

Better-than-expected earnings also ignited gains in Adobe Systems, which jumped $7.25, to $40.25.

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