Strong earnings in tech stocks power market to record highs


NEW YORK -- U.S. stocks soared to record highs as better-than-expected earnings from Motorola Inc. helped restore confidence that second-quarter profits won't disappoint shareholders.

Alliance Semiconductor Inc. and Seagate Technology Inc. added to the strength in tech stocks by posting better-than-expected earnings.

The Nasdaq composite index, loaded with shares of technology companies, posted its biggest advance this year and its third-largest ever, up 18.41 to a record 988.63.

Bank stocks got a big boost when First Chicago Corp. said it will merge with NBD Bancorp Inc., creating the nation's seventh-largest bank.

The Dow Jones industrial average gained 46.69 points to 4,727.29, triggering the New York Stock Exchange's limits on stock-index arbitrage trading for the eighth time this year. It was the index's 44th record high in 1995.

Five rounds of computer-generated "buy" orders pushed shares higher in the final three hours of trading, adding 54.64 points to the Dow industrials, Birinyi Associates Inc. said.

Retail, telephone, soft drink and oil stocks rallied on optimism that the economy will pick up steam in the second half.

The Russell 2000 index of small- company stocks added 2.72 to a record 293.77.

Nearly seven stocks rose for every four that fell on the New York Stock Exchange, where volume totaled 413.2 million shares, up from 376.5 million shares Tuesday. Nasdaq volume reached a record 514.5 million.

The Standard & Poor's 500 index gained 6.11, to a record 560.89. So far this year, the S&P; 500 has jumped 22.1 percent and the Dow industrials have climbed 23.3 percent. The Nasdaq composite index, whose total value of stocks grew to $1 trillion so far this year, is ahead 31.5 percent.

The Wilshire 5000 index grew 60.48, to 5521.58, and the American Stock Exchange climbed 5.15, to 514.2, both records.

Earnings from Motorola, Seagate Technology Inc. and Alliance Semiconductor Corp. eased concern that profits among technology companies might fall short of forecasts.

Motorola, up $7.25, or 10.6 percent, to $75.625, ignited the latest move in a seven-month rally. The maker of semiconductors and cellular telephones earned 79 cents a share in the second quarter, six cents above analysts' forecasts and up from 63 cents last year.

Seagate, ahead $3.50, or 8.5 percent, to $45, earned $1.19 a share in its fiscal fourth quarter, better than the $1.07 last year.

Alliance Semiconductor jumped $4.75, or 7.8 percent, to $60.50. The San Jose, Calif.-based chip maker earned 54 cents a share in its first quarter, up from 15 cents last year.

The improved profits at the three companies relieved concern about technology earnings generated when Advanced Micro Devices Inc. released unexpectedly weak profits late Monday. The direction of technology stocks is especially important since the group has proven the market's bulwark. The Standard & Poor's Semiconductor Index is ahead 81.7 percent this year, while the S&P; index of computer software companies is ahead 44.2 percent.

Regional bank stocks climbed after the merger of First Chicago and NBD was announced.

Bolstered by the Federal Reserve's cut in interest rates last week, the first in almost three years, investors are confident corporate earnings will rise as the economy picks up steam later this year and in 1996, traders said.

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