NEW YORK -- U.S. stocks posted their largest advance in two weeks yesterday as technology issues rallied for a third day and Boeing Co. shares reached a record.
More than a dozen technology companies reported rising earnings, and at least 11 beat analysts' expectations.
"People are beginning to understand what technology has to offer from the point of view of earnings and orderly growth over the next 10 years," said Christopher Fleming, money manager at $1.2 billion Burridge Group in Chicago. "Tremendous growth in personal computers and inter-networking is going to drive demand for all kinds of hardware and software."
Spurred by Intel Corp., ahead $1.75, to $69, and Microsoft Corp., up $2.75, to $96.375, the Nasdaq composite index vaulted 15.18, to 993.75, tied for its eighth-largest point-gain ever. Oracle Systems Corp., Cisco Systems Inc. and Applied Materials Inc. added to the gains.
Computer software, semiconductor and hardware makers reporting higher earnings included Tower Semiconductor Inc., BMC Industries Inc., Dynatech Corp., Logic Devices Inc., Kemet Corp., Amdahl Corp., Integrated Silicon Solution Inc., Zebra Technologies Corp., Symantec Corp. and Proxima Corp.
The Dow Jones industrial average surged 45.78, to 4,714.45, about 22 points shy of a record, fueled by higher prices for Boeing Co., United Technologies Corp. and American Express Co.
The Standard & Poor's 500-stock index gained 4.47, to 561.1, as financial and auto companies also rallied.
Boeing jumped $2, to $66, after reaching a record $67, accounting for six points of the Dow industrials' gain. The world's largest maker of passenger planes said second-quarter earnings rose a greater-than-expected 14 percent, largely because of lower research and development costs. Boeing also won an order for 54 of its 737 models from International Lease Finance Corp.
American Express, Chubb Corp., Baxter International Inc., Monsanto Co., American General Corp., UAL Corp. and Loral Corp. also reported stronger-than-expected quarterly profits yesterday.
More than four stocks rose for every three that fell on the New York Stock Exchange. Nasdaq stock market volume of 499.9 million shares surpassed New York Stock Exchange volume of 373.2 million for a 12th day. The Russell 2000 index of small-company shares added 1.31 to 294.7.
Technology stocks led the market higher as more investors saw computer-related companies as among those offering the fastest earnings growth.
"People are starting to change their views about technology," and think the companies' earnings will grow even if the economy turns down, said Joseph DeMarco, head of equity trading at $4 billion HSBC Asset Management, a unit of Hongkong & Shanghai Bank.
International Business Machines Corp. jumped $2.375, to $109.875, Hewlett-Packard Co. gained as much as $2.75, to $100.25, its highest since April 1991, and Digital Equipment Corp. rose $1.50, to $38.50.
Investors apparently believe "people are going to be buying two or three computers for their homes the way they buy televisions," Mr. DeMarco said.
Makers of computer chips climbed. Intel rose $2.125, to $69.375, Motorola Inc. added $1.50, to $79.625, Micron Technology Inc. surged $2, to $61.875, Texas Instruments Inc. tacked on $2.375, to $155.125, and Applied Materials climbed $2.125, to $101.875.
Software stocks followed Microsoft higher. The leading software maker gained $3.875, to $97.125, Oracle rose $1.4375, to $40.625, and Computer Associates International Inc. jumped $1.125, to $70.375.
So far this year, the 16-stock Philadelphia semiconductor index has leaped 103.3 percent while the 26-stock American Stock Exchange computer technology index is ahead 55.5 percent.