NEW YORK — NEW YORK -- U.S. stocks staged a late rebound yesterday, sending the Nasdaq composite index to a sixth straight record. Computer and paper stocks fueled the advance.
A recovery in U.S. Treasury bonds also helped lift stocks. For an eighth straight day, small and medium-sized companies outpaced big companies such as DuPont Co. and General Electric Co.
Small-company earnings grew about three times as fast as large companies in the first quarter, stock analysts said.
The Dow Jones industrial average climbed 13.01 to 5,566.91, bouncing back from a loss of as much as 45.52 points. Two series of computer-guided "buy" orders helped lift stocks late in the day. Among broad market indexes, the Standard & Poor's 500 index rose 2.70, to 652.87, and the Nasdaq composite climbed 7.34, to a record 1,184.17.
"Investors are flocking to these small-cap domestic stocks," in part because they're unaffected by recent gains in the dollar, said Guy Truicko, money manager for $1 billion in assets at Unity Management in Lake Success, N.Y.
The Russell 2000 index, which tracks some of the smallest companies, rose 1.60, to 346.24, also a sixth consecutive record.
So far this year, the Nasdaq composite is ahead 12.55 percent and the Russell 2000 by 9.58 percent, while the Dow industrials are up 8.79 percent and the S&P; 500 by 6 percent.
Stocks benefited from a turnaround in Treasury bonds. Yields on the benchmark 30-year bond fell to 6.79 percent after reaching 6.86 percent earlier.
Computer-related stocks led the gains in the broad market. Hewlett-Packard Co. led the S&P; 500's advance, rising $3.875, to $110. DSP Communications Inc., which makes chips for wireless personal communications, led the Russell 2000's rise, surging $6.50, to $38.25.
Apart from semiconductor makers, most computer companies "had very good earnings reports" compared with other industries in the first quarter, said Mr. Truicko. "Take Microsoft as an example: Their earnings were up 40 percent. Where else can you get growth like that?"
Shares of Guilford Pharmaceuticals Inc. gained $2.25, to close at $25, a new high, after Alex. Brown & Sons analyst Eric Sichel initiated coverage of the Baltimore-based company with a "strong buy" rating. Trading was 271,100 shares, almost triple Guilford's three-month daily average of 97,000.
Procter & Gamble Co. rose $1, to $85.50, after it said fiscal third-quarter earnings rose 12 percent. Xerox Corp. jumped $4.375, to $145.25. The company reported $2.03 a share in profit from continuing operations in the first quarter, ahead of analysts' average estimate of $1.79.
Paper and lumber companies rallied after a federal appeals court upheld a ruling forcing the Clinton administration to allow cutting in old-growth forests in Oregon and Washington.
International Paper Co., one of the 30 stocks in the Dow industrials, added $1.125, to reach $40.25.
Telephone stocks were among the best performers in the S&P; 500. Bell Atlantic Corp. rose $1.625, to $67, and Nynex Corp. rose $1.125, to $50.125. The two companies agreed to a $22 billion merger earlier this week.
Chemical manufacturers shares declined for a second day. Though Dow Chemical Co.'s earnings of $1.90 a share in the first quarter exceeded analysts' average $1.78 estimate, profits fell 16 percent from last year as product prices dropped.
First-quarter earnings at Monsanto Co. and DuPont Co., reported this week, didn't meet expectations. Not only has demand been weak, DuPont said in its statement on first-quarter earnings, but raw material costs rose 5 percent in the quarter.
DuPont slumped $3.125, to $80.625; Dow fell 62.5 cents, to $87.25, and Monsanto lost $1.25, to close at $148.75.
Pub Date: 4/26/96