NEW YORK -- U.S. stocks rose yesterday as soaring Japanese shares eased concern that weak economies in Asia might drag down U.S. corporate profits. 3Com Corp. led a rally in computer issues, and banks also gained.
The Dow Jones industrial average rose 125.74, or 1.7 percent, to 7,698.22, led by J. P. Morgan & Co., up $4.1875 to $113.4375. The average failed to hold a 165-point gain that would have completed its rebound from a 554-point drop on Oct. 27.
The Standard & Poor's 500 index gained 17.85, or 1.9 percent, to 946.20. The Nasdaq composite index, dominated by computer companies, climbed 30.60, or 1.9 percent, to 1,614.11.
Among other broad market indexes, the Russell 2,000 index of small-capitalization stocks jumped 7.24 to 435.65; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, climbed 162.61 to 9,095.19; the American Stock Exchange composite index increased 6.38 to 679.00; and the S&P; 400 mid-cap index gained 5.56 to 322.27.
More than three stocks rose on the New York Stock Exchange for every one that fell. Nearly 576 million shares changed hands, above the recent daily average of 557 million.
The yield on the benchmark 30-year Treasury bond, which moves opposite from prices, fell to 6.06 percent from 6.10 percent Friday.
The U.S. rally followed a 7.9 percent surge in Tokyo's Nikkei 225 index, spurred by signs that Japan is taking steps to deal with its crippled banking system. Hong Kong's Hang Seng index climbed 4.6 percent, and markets in Europe advanced.
U.S. stocks also were helped by indications during the weekend that Iraq and the United States backed away from a confrontation over Iraq's expulsion of U.S. officials on a United Nations weapons inspection team.
Computer companies were the most actively traded stocks. 3Com rose $3.8125, or 13 percent, to $34.125. Autodesk Inc. jumped 10 percent and KLA-Tencor Corp. gained 9 percent.
EMC Corp., a maker of computer storage devices, rose $2 to $63.625.
Traders said computer stocks led yesterday's advance because they had fallen farther than the rest of the market in recent weeks.
Hewlett-Packard Co. reported fiscal fourth-quarter earnings of 75 cents a share, below First Call's forecast of 77 cents, but sales were stronger than expected, boding well for future quarters, analysts said. Hewlett-Packard rose 62.5 cents to $62.25.
BankAmerica Corp. rose $3.625 to $74.375, and Citicorp rose $7.25 to $123.50.
Building products retailer Lowe's Cos. rose $2.875 to $47.6875 after reporting it earned 50 cents a share in the third quarter, up from 43 cents last year and 2 cents above the average estimate of analysts surveyed by IBES International Inc.
High-end jewelry retailer Tiffany & Co. fell 37.5 cents to $37.4375, giving up a 2.125 gain, after reporting third-quarter earnings of 32 cents a share, a penny above the average in an IBES survey.
Borders Group Inc. rose $1.1875 to $28.75 after reporting that it broke even in the third quarter; analysts had forecast bTC penny-per-share loss.
Toys 'R' Us Inc. fell 12.5 cents to $34.9375 even after its third-quarter earnings beat estimates. The stock rose 17 percent from Oct. 27 through Friday.
Walt Disney Co. rose 2.3125 to 89, gaining for a third day, on expectations of a rise in fiscal fourth-quarter earnings. Disney may report today and is expected to show a 22 percent rise in earnings per share. The company's latest high-profile venture, the Broadway production of "The Lion King," got rave reviews Friday, adding to the positive sentiment.
Anesta Corp. tumbled $3.5625 to $16.9375 after the drug-delivery systems company said it received a letter from the Food and Drug Administration saying the agency won't approve its pain lozenge, Actiq.
Unicom, the electric utility serving Chicago, rose $1.1875 to $29.4375, leading a rally in long-beaten-down utility stocks, after the Illinois Legislature approved a bill to deregulate the industry.
The Dow Jones utilities average rose 4.93, or 2 percent, to 250.53, and many stocks set 52-week highs.
Perkin-Elmer Corp. surged $4.8125 to $72.75 on news that billionaire investor George Soros and affiliates raised their stake in the company to 9.89 percent. Perkin-Elmer makes instruments to test air and water that are used in the pharmaceutical, biotechnology and other manufacturing industries.
Pub Date: 11/18/97