NEW YORK -- U.S. stocks rose to records again yesterday, as retailers such as Wal-Mart Stores Inc. and homebuilders such as Kaufman & Broad Home Corp. gained on optimism that consumer spending will raise corporate profits.
A government report showed monthly home sales in January were the highest in more than four years, as low interest rates helped people buy homes.
The Dow Jones industrial average rose 34.38 to 8,584.83, its fifth record in a row, led by Wal-Mart, up $1.5625 to $48.4375. The Standard & Poor's 500 index gained 4.32 to a record 1,052.02, its fourth record in five days. The Nasdaq composite index fell 1.40 to 1,575.14, as computer companies such as Intel Corp. and Dell Computer Corp. declined on concern that price competition may shrink profit margins.
Among other broad market indexes, the Russell 2,000 index of small capitalization stocks rose 0.88 to 462.42, its high this year; the Wilshire 5,000 index of stocks on the New York, American and Nasdaq exchanges climbed 24.50 to 10,025.15, another record; the S&P; 400 mid-cap index added 1.38 to 354.53, also a record; and the American Stock Exchange composite index slid 1.27 to 708.97.
Advancing stocks led decliners by 1,568 to 1,381 on the New York Stock Exchange, where about 612 million shares changed hands.
Dayton Hudson Corp., which had higher sales at its Target discount chain, rose $2.25 to $80.0625 after beating the average earnings forecast of $1.45 per share by 7 cents. Federated Department Stores Inc., which operates Bloomingdale's and Macy's, met earnings expectations and rose $1.50 to $47.875.
After the government's report on home sales, the yield on the 30-year Treasury bond jumped 7 basis points to 6.07, a 12-week high.
Ford Motor Co. rose $2.125 to $58.9375 after the automaker said it expects a $16.5 billion first-quarter gain from spinning off its stake in its consumer finance unit, Associates First Capital Corp. It was the largest spinoff in U.S. corporate history.
Airline stocks advanced, sending the S&P; airlines index up 3.8 percent. US Airways Group Inc. rose $4.5625 to $68.0625 after Merrill Lynch & Co. analyst Candace Browning said the shares could reach $77 in the next 12 months, partly because the company is buying back its stock.
AMR Corp., which owns American Airlines, rose $4.5625 to $132.5625. UAL Corp., which owns United Airlines, gained $4 to $87.25.
Compaq fell $1.3125 to $29.8125 after the company's chief financial officer said the No. 1 maker of personal computers faced competitive pricing in North America, according to a Merrill Lynch & Co. analyst, Lucianne Painter, who lowered her earnings estimate for the first quarter by 5 cents a share. Compaq rose 85 percent during the past year. Rival Dell fell $4.50 to $131.125.
Intel Corp., the world's largest chip maker, fell $2.3125 to $85.3125. Orders for computer chips are weak because of excess production capacity, manufacturers' inventory reductions and slowing consumer demand, Merrill Lynch analyst Thomas Kurlak said in a report, after hearing company presentations at Merrill's technology conference. Intel is still up 21 percent year to date.
Open Market Inc. rose $2.375 to $18.125 after the software maker said it received three patents for electronic-commerce technology that lets customers pay for purchases on the Internet. PC Connection Inc., a direct marketer of brand-name personal computers, jumped $3.75 to $21.25 in its first day of trading.
Energy Group American depositary receipts rose 75 cents to $55.25 as two U.S. companies escalated their bidding war for the United Kingdom power company. Texas Utilities Co. yesterday topped a bid by PacifiCorp, which yesterday topped a Texas Utilities offer.
XLConnect Solutions Inc. rose $4.50 to $21.75 on a report that it may be bought by Xerox Corp.
Pub Date: 3/04/98