NEW YORK -- U.S. stocks rose for a second day yesterday, as semiconductor, computer and software stocks soared.
International Business Machines Corp. and Intel Corp. had their biggest one-day advances since January.
The Dow Jones industrial average gained 38.44 to 6,346.77, extending Tuesday's 39.98-point rise in the first back-to-back gain since Nov. 25.
The Standard & Poor's 500 index rose 5.50 to 731.54, and the Nasdaq composite index jumped 19.06 to 1,285.38.
On the broad market, the Russell 2,000 index of small capitalization stocks climbed 2.95 to 353.08; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, leaped 55.12 to 7,083.25; the American Stock Exchange market value index climbed 4.65 to 574.96; and the S&P; mid-cap index added 2.50 to 249.87.
Maryland stocks rose, led by Alex. Brown Inc., up $3.125 to $65.25, and Guilford Pharmaceuticals Inc., up $2.50 to $19.
Advancing issues outnumbered declining stocks by more than 15-to-9 on the New York Stock Exchange, where volume declined to 500 million shares from Tuesday's 520 million.
The yield on 30-year Treasury bonds rose to 6.70 percent from 6.65 percent after the Treasury's sale of $18.25 billion in two-year notes met with tepid demand.
Computer, semiconductor and software companies rebounded from last week's slide. The Morgan Stanley high-tech index gained 16.60, or 4.35 percent, to 398.01, adding to Tuesday's advance after falling for five straight days.
Computer stocks benefited from a Wall Street Journal report saying personal computer sales were ahead of last year at 58 percent of retailers surveyed in a recent poll, while only 16 percent of the chains saw declining sales.
In response, International Business Machines Corp. surged $6.75, or 4.4 percent, to $158.625; Hewlett-Packard Co. rose $2.50 to 452.75; EMC Corp. gained $2.75 to $32.50; Seagate Technology Inc. advanced $2.125 to $39.50; Lattice Semiconductor Corp. climbed $3 to $42.625; and Gateway 2000 Inc. leaped $4.50 to $59.50.
Also among the gainers were Intel Corp., up $5.75 to $135.75; Dell Computer Corp., ahead 43.125 to $56.50; Microsoft Corp., $2.75 higher at $82.625; Compaq Computer Corp., up $6.375 to $78.625; and Cisco Systems Inc., up $1.25 to $64. Those are the computer stocks most money managers are attracted to, said Liam Dalton, president of Axiom Capital Management with $400 million in assets.
3Com Corp. vaulted $5.125 to $77.50. The maker of computer networking equipment is scheduled to release fiscal second-quarter earnings later this week.
Brokerages also turned more bullish on computer stocks. Compaq, for instance, was raised to a "buy" from "hold" at SoundView Financial Group, software maker Shiva Corp., up $3.875 to $39.875, was rated a new "buy" at Dillon Read & Co. and Gateway 2000 was upgraded to "buy" at Dean Witter Reynolds Inc.
Investment banks and brokerages rose the most among financial issues. On Tuesday, Goldman Sachs Group LP said its fourth-quarter earnings surged 69 percent to $743 million, raising expectations for earnings at other banks and brokers.
Morgan Stanley Group Inc. rose 75 cents to $56.75; Dean Witter Discover Inc. gained 87 1/2 cents to $66.875; Merrill Lynch & Co. added $2.125 to $80.125; and Travelers Group Inc., parent of Smith Barney Inc., advanced 87.5 to $43.25.
Alex. Brown Inc. surged $3.125 to $65.25; Paine Webber Group Inc. gained $1.875 to $29; and Donaldson, Lufkin & Jenrette Inc. rose $1.625 to $34.75.
Genetics Institute Inc. soared $22.875 to $84.625 after American Home Products Corp. exercised its option to buy the 40 percent of the biotechnology company it doesn't already own for a total of $1.2 billion, or $85 a share. American Home fell 12.5 cents to $59.125.
Pub Date: 12/19/96