NEW YORK -- U.S. stocks rose again yesterday after Japanese shares rallied on signs that the government will move to fix the shaky financial system of the world's second-largest economy.
The day's advance broadened to include small stocks and large computer issues.
The Dow Jones industrial average rose 101.87, or 1.3 percent, to 7,826.61, its highest close since Oct. 23. The Standard & Poor's 500 index rose 14.39, or 1.5 percent, to 958.98, boosted by a rise in regional banks on expectations of more takeovers.
The Nasdaq composite index, which is dominated by computer companies, rose 25.34, or 1.6 percent, to 1,626.56. Eight of the 10 most active stocks in the United States yesterday were in the computer industry, where stocks were hard hit in the market plunge of Oct. 27 and its aftermath.
Applied Materials Inc., a computer industry bellwether that makes equipment used to produce semiconductors, rose $2.6875 to $37.625. More than 19 million shares changed hands, making Applied Materials the most actively traded issue on U.S. exchanges.
Disk drive maker Quantum Corp. rose $2.4375 to $28.5625 and Intel Corp. gained $1.8125 to $80.875. Texas Instruments Inc., which fell from $141 last month to $93.75 last week, surged $5.75 to $103.75.
Among other broad market indexes, the Russell 2,000 index of small stocks, which fell Wednesday as larger issues rallied, rose 5.01 to 435.70; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, climbed 124.46 to 9,191.74; the American Stock Exchange composite index increased 5.00 to 672.85; and the S&P; 400 midcap index gained 4.46 to 323.60.
Advancing issues swamped decliners by 2 to 1 on the New York Stock Exchange. Almost 602 million shares changed hands, topping the recent daily average of 540 million shares.
Large international banks benefited from optimism that the troubles in Japan -- where many are big lenders and traders -- may ease. Regional banks gained on speculation that more takeovers are in the cards beyond First Union Corp.'s deal to buy Core-States Financial Inc. for $16.1 billion, the largest U.S. bank merger ever.
BankAmerica rose $1.75 to $75.25 and Citicorp rose $1.75 to $127. Chase Manhattan Corp. rose $1 to $112.375.
Among the regionals, PNC Bank Corp. rose $1.6875 to $52.50; KeyCorp. rose $1.4375 to $65.5625; and Fleet Financial Group Inc. gained $1.6875 to $67.4375.
Morgan Stanley, Dean Witter, Discover & Co. jumped $2.875 to $54.875 and Lehman Brothers Holdings Inc. rose $2.8125 to $48.375.
The yield on the benchmark 30-year Treasury bond rose 3 basis points to 6.06 percent.
Utility stocks, the stock market's proxy for the safety of bonds, rose yesterday, with the Dow Jones utilities average gaining 4.30, or 1.7 percent, to 255.52. That put it within a whisker of its record of 256.46 set Sept. 13, 1993.
The Dow Jones transportation average did even better, jumping 2.5 percent.
AMR Corp. led the gains, rising $4.6875 to $119.9375.
Japan's prime minister agreed yesterday to ask his ruling Liberal Democratic Party to consider using public money to help the banks -- a step the finance minister had ruled out on Wednesday, causing a 5.3 percent drop in Japan's Nikkei 225 index.
Yesterday, the Nikkei jumped 2.94 percent to 16,308.49, and European markets responded in kind. Britain's FT-SE 100 index rose 1.62 percent, Germany's DAX Ibis index gained 1.42 percent and France's CAC 40 index rose 1.10 percent.
Rambus Inc. soared $17.9375 to $60.9375 after a bullish report by analyst Robert Chaplinsky at Hambrecht & Quist.
The company designs high-speed computer memories that boost internal computer communications.
Pub Date: 11/21/97