CUPERTINO, Calif. -- Apple Computer Inc. shares rose to their highest level in almost three years yesterday amid optimism that strong sales of the new iMac personal computer will help the company's turnaround.

Shares of the computer-maker rose $1.4375 -- 3.6 percent -- to $41.9375 in trading of 8.31 million shares, more than double the three-month daily average. Shares of Apple are up 220 percent since the beginning of the year.

First-day sales of Apple's iMac, which debuted Saturday, were expected to top $25 million, and retailers are reporting strong demand.

Investors are betting that the iMac, a computer designed to give consumers easy access to the Internet, will make the once-struggling company's return to profitability permanent.

"It's one of the few stocks we are advising clients to buy right now," said Dodge Dorland, chief technical analyst at Landor Investment Management in New York.

CompUSA, Apple's largest retailer, declined to say how many of the $1,299 iMacs it has sold, but Vice President Larry Mondry said yesterday that thousands have been sold. "We sold more iMacs [Saturday] than we've ever sold of any computer on a single day," he said.

Cupertino, Calif.-based Apple said last week that it had booked orders for 150,000 of the translucent, blue, egg-shaped machines.

Apple was in dire straits a little more than two years ago, when cash dwindled to $592 million and its market share seemed on the verge of evaporating.

Co-founder and interim Chief Executive Officer Steve Jobs returned and helped turn that around, with a market share that has begun to go back up, a strong lineup of new products and three straight quarterly profits.

Pub Date: 8/18/98