NEW YORK — NEW YORK -- U.S. stocks rose for a second day yesterday, amid optimism that international bankers will reschedule loans to South Korean banks and give the country more time to rebuild its economy. J. P. Morgan & Co. and other banks gained.
The Dow Jones industrial average rose 113.10, or 1.5 percent, to 7,792.41, its biggest gain in four weeks. AlliedSignal Inc., up $2.4375 to $38.25, led the advance after optimistic comments by its chief executive. J. P. Morgan, the largest stock in the Dow, rose $2.1875 to $113.625.
The Standard & Poor's 500 index rose 16.90, or 1.8 percent, to 953.36, and the Nasdaq composite index gained 26.07, or 1.7 percent, to 1537.45.
Among other broad market indexes, the Russell 2,000 index of small capitalization stocks added 5.18 to 426.67; the Wilshire 5,000 index, made up of stocks on the New York, American and Nasdaq stock exchanges, climbed 143.74 to 9,119.24; the American Stock Exchange composite index rose 5.52 to 669.29; and the S&P; 400 midcap index gained 4.75 to 325.04.
The gains in stocks came as five of Wall Street's biggest firms said in a statement that they are "ready to participate in the program of support for Korea."
About two stocks rose for every one that fell on the New York Stock Exchange. About 443 million shares changed hands, below the three-month daily average of 565 million.
Investors attached little significance to yesterday's rally, just as they dismissed Friday's gains. "We're in a trading range and we're going to bounce around," said Doll, who has been raising his cash reserves. "The Asian problem will linger for months."
The U.S. stock market's returns probably will be limited to about 5 percent next year because Asia's slowing economies will reduce profit growth, Doll said. His biggest holdings are Compaq Computer Corp. and BankBoston Corp.
AlliedSignal rose after Barron's reported that the industrial products conglomerate may earn $3 a share by 2000 and its stock is expected to hit $50 to $52 during the next 12 months, according to CIBC Oppenheimer analyst Michael Bunyaner. Chairman and Chief Executive Lawrence Bossidy wants to boost revenue by 12 percent annually for the next three years to reach $20 billion in 2000, the paper said.
AlliedSignal has fallen 19 percent since July 25. It is up 14 percent this year, half the gain in the benchmark S&P; 500.
Gadzooks Inc. rose $3 to $22.375 after the retailer of clothing for teen-agers reported a stronger holiday sales season than it had anticipated. Total sales for November and the first 28 days of December rose about 37 percent from a year earlier.
Microsoft Corp. rose almost 5 percent, up $5.5625 to $126.3125, its biggest gain since July. Saudi billionaire Prince Alwaleed bin Talal plans to invest an undisclosed sum in Teledesic Corp., a Microsoft-backed company that plans a $9 billion satellite network.
Earlier this month, Microsoft shares fell to their lowest level since May amid growing uncertainty about how the company's hard-line attitude will affect its court battle with the Department of Justice.
Microsoft has argued that it must be allowed to fold new features, including its Internet browser, into updated products. The Department of Justice contends that Microsoft has abused its dominant position by forcing computer makers to install new features whether they want them or not.
Heartstream Inc. fell $1.125 to $10.75 after Hewlett-Packard Co. said it would acquire the company for about $129.7 million in stock, to expand its line of defibrillators for heart patients.
Hewlett-Packard Co. rose 56.25 cents to $60.9375.
Bethlehem Steel Corp. fell 31.25 cents to $7.9375 after saying it will shut its Bethlehem Coke division in March because of "significant operating losses."
Pub Date: 12/30/97