Nasdaq shatters 1,600 barrier Intel up $3.125 to $96.75; Wal-Mart and Sears pace Dow index's 4-point rise; Wall Street

THE BALTIMORE SUN

NEW YORK -- U.S. stocks rose yesterday, led by Intel Corp. and Wal-Mart Stores Inc., as investors saw no end to the seven-year bull market.

Intel, rising $3.125 to $96.75, led a rally in semiconductor shares that sent the Nasdaq composite index up 11.12 to a record 1,605.45, the index's first trip above 1,600.

The Dow Jones industrial average rose 4.41 to 8,198.45, and the Standard & Poor's 500 index rose 3.16 to 950.30.

Retailers Wal-Mart and Sears, Roebuck & Co. helped lead the Dow higher, rising on optimism that July sales reports -- out later this week -- would come in above analysts' expectations.

"The economic environment is very positive" for stocks, said Joseph Stocke, head of equity investments at Meridian Investment Co., which manages about $4 billion.

"Inflation is well under control, and we are still seeing strong corporate profits."

The Russell 2,000 index of small capitalization stocks gained 1.42 to 415.63; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, spurted 27.48 to 9,005.06; the American Stock Exchange composite index climbed 2.40 to 646.59; and the S&P; mid-cap index gained 1.15 to 315.08

"Valuations are high, and investors want constant reinforcement the perfect economic scenario is still intact," said Barbara Marcin, a money manager with Citibank Global Asset Management in New York, which oversees $80 billion.

The slow-growth, low-inflation picture that has sent stocks to records since April was shaken Friday by unexpectedly strong reports on job growth and industrial prices.

The yield on the 30-year Treasury bond, which had fallen to 6.30 percent from 7.17 percent in April, has jumped to 6.47 percent.

"If we're getting a pickup in inflation, the market could be in for a shock," said Richard Eakle, an independent analyst in Fair Haven, N.J. "That could change sentiment."

Rising rates make it more expensive for companies to borrow and expand, and usually coincide with a falling stock market.

Yet investors said they're confident the seven-year stock market rally will continue as long as corporate profits continue growing.

"It's no secret that valuations are high, but we think stocks can move higher as long as earnings come through, and earnings are coming through," said Michael Weiner, equity research chief at Banc One Investment Advisors Corp.

A strike against the United Parcel Service of America buoyed shares of the company's rivals. Yellow Corp., a trucking company, gained $1.1875 to $28.25, Airborne Freight Corp. rose $1 to $48.75 and Federal Express Corp. climbed 75 cents to $63.6875.

More than 185,000 members of the International Brotherhood of Teamsters went on strike at midnight.

Fisher Scientific International rose 2.4375 to 50.8125 after Bloomberg News reported that Kohlberg, Kravis Roberts & Co. is considering a bid for the scientific equipment company.

British Airways PLC's American depositary receipts dropped 4.75 to 100.8125 after the company reported that first-quarter profit fell 36 percent.

Earnings were hurt by a stronger pound and lost bookings from a cabin crew strike.

Dow Chemical Co. fell 18.75 cents to $93.875 after it said it's buying Sentrachem Ltd. of South Africa.

Oracle Corp. said it's buying closely held Treasury Services Corp. for $120 million in cash. Oracle gained $1 to $55.875.

Microsoft Corp. rose 93.75 cents to $141.5625 after the software giant won approval from the U.S. Justice Department for its $425 million acquisition of WebTV Networks Inc.

General Motors Corp. fell $1.8125 to $62.625, limiting the Dow's gains, after failing to raise its dividend, disappointing investors.

Pub Date: 8/05/97

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