NEW YORK -- U.S. stocks rose yesterday, as optimistic analyst reports on Intel Corp. and Compaq Computer Corp. sparked a rally in computer, semiconductor and software shares that sent the Nasdaq composite index to a record.
The rally in computer shares pushed the Nasdaq up 42.26, or 2.1 percent, to 2,086.14, breaking the record it set Dec. 9.
Intel rose $3.125 to $120 and Compaq gained $2.625 to $42.6875 after analysts at Morgan Stanley Dean Witter & Co. issued bullish reports on the two companies, which are the biggest makers of semiconductors and personal computers, respectively.
The Dow Jones industrial average rose 27.81, to 8,903.63, led by IBM, which climbed $5.5625 to $171.625. The Standard & Poor's 500 index gained 8.05, to 1,188.03.
The Russell 2,000 index of small-cap stocks rose 3.64, to 397.42; the Wilshire 5,000 index increased 86.89, to 10,818.56; the American Stock Exchange composite index advanced .82, to 651.25; and the S&P; 400 midcap index added 1.02, to 354.39.
The Sun-Bloomberg Maryland index of the top 100 Maryland stocks gained 1.10, to 188.67.
Advancing stocks led declining shares by an 8-to-7 ratio on the New York Stock Exchange. Trading on the Big Board totaled 839 million shares, well above the daily average of 742 million shares for the past three months.
For the week, the Dow industrials rose 0.9 percent, the Nasdaq composite jumped 2.8 percent and the S&P; 500 rallied 1.9 percent. The Russell 2,000 index of small stocks managed a gain of only 0.5 percent, indicating that investors are sticking to large, well-known companies.
Five of the 10 stocks that contributed the most to the S&P; 500's gain were computer-related, as were seven of the 10 most active stocks in U.S. trading.
Among computer chip makers, Applied Materials Inc. rose $4.3125 to $45.4375; Novellus Systems Inc. gained $4.625 to $53.875; and Applied Sciences & Technology Inc. advanced $1.0625 to $9.1875.
Cisco Systems Inc. rose $5.5625 to $90.4375, and Dell Computer Corp. gained $2.0625 to $67.875. Cisco shares were raised to a "strong buy" from "buy" by S.G. Cowen Securities Corp. analyst Christopher Stix. He raised his estimate for the company's 2000 earnings to $1.86 a share from $1.77.
Drug shares fell after the Wall Street Journal reported that pharmaceutical companies are battling legislation in Congress that would reduce the price Medicare recipients have to pay for medicines. Merck & Co. dropped $3.1875 to $144.75; Schering-Plough Corp. lost $1.625 to $52.1875; and Bristol-Myers Squibb Co. fell $2.875 to $120.875.
Merrill Lynch & Co. rose $1 to $68.9375. Institutional and individual investors have been betting the largest U.S. brokerage will gain.
FDX Corp. jumped $6.0625 to $82.375 after the parent of Federal Express reached a tentative labor settlement with pilots of the largest overnight-delivery service.
Nike Inc. fell $1.8125 to $39.6875. The world's largest maker of athletic shoes and clothing said fiscal second-quarter profit dropped 51 percent as the National Basketball Association's lockout hurt sales.
AMR Corp., the parent of American Airlines, rose $1.50 to $60.0625 on optimism that the government may relax restrictions on foreign ownership of U.S. carriers. Transportation Secretary Rodney Slater said the U.S. may propose easing the law that prohibits foreigners from owning more than 25 percent of a U.S. carrier.
Aliant Communications Inc., which provides cellular and local phone service in Nebraska, jumped $6.375 to $37.25 after it agreed to be acquired by Alltel Corp. for $1.63 billion in stock and assumed debt. Alltel will pay $39.13 in stock for each share of Aliant, a 27 percent premium to Aliant's closing price yesterday.
Kuhlman Corp. rose $5.875 to $37.375 after the maker of turbochargers for commercial vehicles agreed to be acquired by Borg-Warner Automotive Inc. for $39 a share, or $660 million.
Pub Date: 12/19/98