NEW YORK -- U.S. stocks surged yesterday, as the Dow Jones industrial average rose more than 100 points for a third straight day, to push over 8,000 for the first time in seven trading days.
Better-than-expected earnings from Dell Computer Corp. boosted computer-related companies.
"It's unbelievable," said Bob Streed, a money manager at Northern Trust Co., which oversees about $130 billion. "Last Friday, it looked pretty ugly. But at the first sign the world wasn't coming to an end, the cash just poured in."
The Dow jumped 103.13 to 8,021.23, capping its best three-day performance since mid-April.
The 30-stock average has regained the 247 points that it lost Friday, and it is 253 points from its Aug. 6 high.
The Nasdaq composite index soared 27.99 to 1,628.70, within two points of its record.
The Standard & Poor's 500 index rose 13.34 to 939.35.
The rally, like Tuesday's, was broad.
Two stocks rose for every one that fell on the New York Stock Exchange, in trading of 520.1 million shares, about average for the past three months.
Small stocks are doing about as well as big ones. The Russell 2,000 index, a small-stock benchmark, gained 5.28 to 419.07. Its advance was 1.3 percent, the same as the Dow, which is composed of big multinationals.
Since April 11, when the Dow ended a slump, it is up 25 percent, and the Russell 2,000 is up 24 percent.
Among other broad market indexes, the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, jumped 119.77 to 8,946.54; the American Stock Exchange composite index advanced 11.90 to 819.04; and the S&P; 400 midcap index added 3.07 to 314.65.
Dell, the most active stock in U.S. trading, rose $3.1875 to a record $87.875.
After the close of trading Tuesday, Dell said second-quarter earnings soared 91 percent, beating estimates for earnings per share by 5 cents.
Its shares have more than tripled this year.
Compaq Computer Corp. rose $4.25 to a record $65 and Intel Corp. gained $2.59375 to $100.50, also a record.
Microsoft Corp. rose $1.75 to $140.5625.
"Investors like to extrapolate, and they assume what's good for Dell is good for other computer companies," said Bill O'Hearn, a money manager with McKinley Capital Management Inc. in Anchorage, Alaska, which oversees $1.2 billion. "I agree. There's huge demand for technology, and these companies deliver easy earnings."
Drug stocks rallied, after a Morgan Stanley Dean Witter Discover analyst raised his rating of Eli Lilly & Co. Lilly soared $6.25 to $112.50; Merck & Co. rose $1 to $95.75; and Pfizer Inc. gained $2.6875 to $55.875.
The same analyst, Paul R. Brooke, warned earlier this month that the "honeymoon" between investors and drug stocks is over for the moment, and that drug companies are likely to earn less than expected in the second half of the year.
The S&P; drugs index has risen 31 percent this year, after being up as much as 40 percent in late July.
Just for Feet Inc. fell $2.875 to $12.50, after the athletic shoe company said its net income rose to 16 cents, 4 cents below expectations.
Kohl's Corp. dropped 12.5 cents to $64.875, after the retailer said earnings rose to 28 cents a share, 2 cents better than estimates.
Talbots Inc. rose $1.6875 to $27.6875, after the women's retailer reported a loss of 35 cents, 3 cents higher than analysts polled by IBES International Inc. predicted.
First Union Corp. rose 87.5 cents to $47.8125 after it agreed to buy Wheat First Butcher Singer, a Richmond, Va., brokerage, for about $471 million in stock.
Pub Date: 8/21/97