NEW YORK -- U.S. stocks, led by computer networking and chemical issues, jumped yesterday for a second day amid speculation the Federal Reserve is done raising interest rates for this year.
"We're very close to a peak in interest rates," said Wayne Nordberg, money manager at $16 billion Lord, Abbett & Co. "The market could push somewhat higher, assuming the Fed doesn't raise rates next week," when its policy-making committee meets, he said.
The Dow Jones industrial average climbed 19.18, to 3,765.47, adding to Wednesday's 30.95-point advance and reaching its highest point since Nov. 21. International Paper Co., Aluminum Co. of America and United Technologies Corp. led the advance. Since last Thursday, the Dow has gone up 79.74 points, or 2.16 percent.
The Standard & Poor's 500 index gained 0.38, to 455.35, extending Wednesday's 4.82-point increase, as higher prices for newspaper, paper and communications equipment stocks outweighed falling prices for electric utilities and phone issues.
The Nasdaq combined composite index climbed 5.01, to 730.68, its fourth-straight advance. Technology stocks jumped in DTC reaction to stronger-than-expected earnings from 3Com Corp. and Cabletron Systems Inc., makers of equipment that links computers.
The Russell 2000 index of small-company shares, which has risen every day this week, rose 3.32, to 241.2. The Wilshire 5000 index increased 17.13, to 4,480.9, its fifth straight gain.
Advancing stocks outpaced declining issues by 15-to-8 on the New York Stock Exchange, where volume dropped to 337 million shares from 355 million Wednesday.
Computer networking companies surged after 3Com posted fiscal second-quarter earnings of 55 cents a share, up from 32 cents last year and analysts' estimate of 44 cents. Cabletron, meanwhile, had third-quarter earnings of 59 cents, compared with 44 cents last year and forecasts of 56 cents.
3Com's "blowout" sales of products based on advanced switching technology indicate demand for expensive, high profit-margin devices is growing, said Paul Weinstein, analyst at PaineWebber Inc. "The numbers from 3Com indicate that the switching market is on fire."
3Com climbed $6.25, to a record $48.375, and Cabletron added $1, to $47.50.
In addition, Cisco Systems Inc. spurted $1.6875, to $33.4375; Bay Networks Inc. increased $1, to $26.50; Chipcom Corp. rose $2, to $42.75; Alantec Corp. added $4.375, to $25.625; and Network Peripherals Inc. climbed $2.75, to $25.75.