NEW YORK -- U.S. stocks rose to record highs for a third straight day yesterday as investors snapped up shares of computer-related companies, betting they will post the biggest profit gains next year.
The advance in technology stocks helped the market overcome disappointing earnings from Walt Disney Co. Disney's report sparked concern that even shares of steady-growing consumer products companies could be vulnerable to profit shortfalls in the coming months.
The Dow Jones industrial average rose 7.22 to an all-time high of 5,078.10, its 12th gain in 14 days.
The Standard & Poor's 500 index jumped 5.13 to a record 606.45, its third straight high.
Among broad market indexes, the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, jumped up 47.21, to 5,951.47; the Russell 2,000 index of small capitalization stocks rose 1.39, to 304.62; the Amex market value index slid 0.12, to 530.74; and the S&P; 400 midcap index climbed 1.22, to 215.55.
The Nasdaq composite index, benefiting from the gain in technology shares, jumped 20.73, to 1,050.05 -- its biggest one-day advance since Sept. 28.
Computer-related stocks got a boost from Goldman, Sachs & Co.'s bullish outlook on the Internet. Analyst Michael Parekh predicted shares of Netscape Communications Corp. could rise as high as $200 during the next two years. After it was put on Goldman's recommended list, Netscape's stock surged $20, to $131.
Shares of computer chip companies gained amid expectations that Applied Materials Inc. would exceed earnings estimates in its fiscal fourth quarter. The company's results, announced after the market closed, only matched estimates.
A report from the Commerce Department showing starts of new U.S. housing unexpectedly fell for the third consecutive month in October hurt stocks early. The report provided further evidence an important source of economic strength is weakening.
Rising stocks on the New York Stock Exchange exceeded those falling 1,249 to 1,047. NYSE volume reached 412 million shares, up from 356.18 million yesterday.
Disney's shares dropped $1.375, to $61.50, after it said fourth-quarter profits rose 17 percent, less than its recent growth rate.
International Business Machines Corp. gained $1.125, to $97, after the company's board authorized the repurchase of an additional $2.5 billion in stock.
Among other technology companies that surged, Intel Corp. rallied $3.75, to $63.75; Micron Technology Inc. jumped $6.25, to $54.875; and Applied Materials rose $4.125, to $46.25.