NEW YORK -- U.S. stocks rallied yesterday, as gains in computer-related companies and retail shares led the market's sixth advance in the past seven days.
The Dow Jones industrial average rose 22.56 to 5,718.67, its first close above 5,700 since July 3. The 30-stock barometer is just 59.33 points, or 1 percent, below its May 22 peak.
In the broader market, the Standard & Poor's 500 index gained 1.78 to 664.16 and the Nasdaq composite index climbed 12.24 to 1,141.11.
More than 13 stocks rose on the New York Stock Exchange for every 10 that fell.
Stock prices climbed even as the Treasury's sale of $10 billion in 10-year bonds met with lukewarm demand from investors and oil shares weakened on U.S. approval of Iraqi crude sales.
The yield on 30-year Treasury bonds rose to 6.77 percent from 6.76 percent Tuesday, down from a recent high of 7.19 percent on July 5.
Optimism that the economy will continue to register moderate growth and avoid sliding into recession boosted cyclical stocks. The Morgan Stanley cyclical index rose 3.21 to 363.26.
By contrast, Morgan Stanley's index of 30 consumer-growth companies, such as Johnson & Johnson and Gillette Corp., gained only 0.34 to 309.27.
Increased quantities of cash from individual investors pouring into stock mutual funds will give money managers more ammunition to send prices higher, traders said.
In the past few days, equity mutual funds took in cash at an estimated monthly rate of almost $35 billion, according to Mutual Fund Trim Tabs, a Santa Rosa, Calif., newsletter.
That was above the average $25 billion a month that funds were taking in earlier this year, before the market slumped. In the first seven months of 1996, the Investment Company Institute estimated that a record $142 billion was invested in stock funds, although the pace of buying in July was the slowest since November 1994.
Semiconductor, software and computer shares contributed the
most to the market's advance on expectations of improved earnings in coming months.
Micron shares jumped $3.75 to $26; Texas Instruments Inc. climbed $3 to $48.50; Intel Corp. gained $2.484375 to $82.359375; and Applied Materials Inc., a maker of machinery for chip factories, advanced $2.3125 to $27.4375.
International Business Machines Corp. led the Dow average's advance, rising $3.25 to $112.875. Hewlett-Packard Co., jumped to $46.25.
Retailers gained: Sears Roebuck & Co., a member of the Dow industrials, rose 62.5 cents to $43.50; electronics chain Tandy Corp. jumped $1.25 to $45.75; and Home Depot Inc. was 62.5 cents higher at $53.
Masco, a maker of building materials and supplies, rose 87.5 cents to $29.25, even after reporting that second-quarter earnings rose to 42 cents a share from 36 cents a year ago, a penny below analysts' average estimate.
Ingersoll Rand Co., a maker of compressors and other construction equipment, gained $1.50 to $45.50 after lifting its // quarterly dividend by 11 percent to 20.5 cents a share.
Mergers and acquisitions continued to lay a solid foundation for U.S. stocks, analysts said.
Freeport-McMoRan Inc. a fertilizer and mining company, agreed to buy Arcadian Corp. another fertilizer maker, to form a new $3 billion company. Arcadian rose $1.375 to $22. Freeport-McMoRan fell $1 to $35.50.
Pub Date: 8/08/96