NEW YORK -- U.S. stocks rose for a second day, led by software, computer and telecommunications equipment companies such as Microsoft Corp., Compaq Computer Corp. and Lucent Technologies Inc., on expectations that they will have the fastest earnings growth in coming months.
The Nasdaq composite index climbed 37.48, or 1.9 percent, to 2,040.64, a record close.
The Dow Jones industrial average rose 54.33, to 9,070.47, and the Standard & Poor's 500 index gained 10.96, to 1,187.70.
On the broad market, the Russell 2,000 index of small-capitalization stocks rose 2.80, to 401.17; the Wilshire 5,000 index jumped 105.44, to 10,849.09; the American Stock Exchange composite index advanced 3.95, to 664.34; and the S&P; 400 midcap index added 5.14, to 360.68.
The Sun-Bloomberg Maryland index of the top 100 Maryland stocks slipped 0.51 yesterday, to 193.24.
Advancers outnumbered decliners by a 4-to-3 ratio on the New York Stock Exchange.
Compaq rose $3, to $41.6875, and was the most active U.S. stock, with 30 million shares changing hands.
Analysts expect Compaq's earnings almost to quadruple next year, according to First Call Corp.
International Business Machines Corp. rose $2.9375, to $167.1875, accounting for almost one-quarter of the Dow average's gain.
Microsoft surged $6.1875, to $133.5625, after South Carolina dropped out of the antitrust case against the biggest maker of software for personal computers.
Intel Corp., the world's biggest computer chip maker, climbed $2.625, to $118.9375.
Cisco Systems Inc. gained $1.9375, to $80.1875. Lucent rose $4.25, to $100, adding to Friday's 8.4 percent surge.
The world's largest telecommunications equipment maker told some analysts and investors Friday that demand for its products lTC is strong and that all of its major plants are running at capacity.
Minnesota Mining & Manufacturing Co. posted the biggest decline in the Dow industrials, falling $3.1875, to $77.0625, as the dollar strengthened against the Japanese yen. The company gets more than 50 percent of its revenue from outside the United States, with a big chunk of that coming from Asia.
Warner-Lambert Co. dropped $2.5625, to $75.875, after U.S. regulators said about 33 people died after taking Rezulin, the company's diabetes pill.
Mylan Laboratories Inc., the world's second-largest maker of generic drugs, slumped $2.4375, to $31.9375.
Antitrust enforcers are preparing to sue Mylan for raising its prices after attempting to corner the market on raw materials used to make the drugs, said people familiar with the case.
Commonwealth Energy System, an electricity and natural gas utility in eastern Massachusetts, rose $2.0625, to $39.875, after saying it will merge with BEC Energy, the parent of Boston Edison Co. BEC fell $1, to $41.
FDX Corp., the parent of transportation company Federal Express, soared $4.75, to $72, after Barron's magazine said the company should be considered more of an Internet company, because it delivers products ordered over the global computer network and is likely to benefit from the boom in electronic commerce.
Oxford Health Plans Inc. rose $3.1875, or 27 percent, to $14.875, as analysts said the managed health care company's new management has been able to hold onto more members than expected while raising premiums.
United Healthcare Corp. gained $1.1875, to $47.9375; Humana Inc. added $1.3125, to $20.9375; and Aetna Inc. gained $2.50, to $82.0625.
Among oil service stocks, Smith International Inc. rose $3.375, to $27, and Transocean Offshore Inc. rose $3.125, to $27.75.
Interlake Corp. surged $3.4375, to $6.9375, after GKN PLC, a U.K. defense company, agreed to buy it for $553 million, paying $7.25 a share, more than double Friday's closing price of $3.50.
Maxxam Inc., a lumber and metals company, gained $7.375, to $56.75. The stock may be undervalued given its unprecedented agreement with the federal government to stop logging in some areas, and one money manager believes it's worth at least $122 a share, Barron's reported.
Adtran Inc. fell $1.9375, to $21.50, after the telecommunications-equipment maker said fourth-quarter revenue and earnings will be "substantially below" expectations because of slowing demand from large phone companies.
The company was expected to earn 32 cents a share in the fourth quarter, based on the average estimate of analysts polled by First Call.
About 656 million shares changed hands, down from a three-month average of 747 million.
Pub Date: 12/08/98