NEW YORK -- The Standard & Poor's 500 and Nasdaq composite indexes set records yesterday, led by computer-related shares, after analysts predicted that Microsoft Corp. and MCI WorldCom Inc. will soar in 1999 as the companies' earnings growth rates beat the average of other S&P; 500 members.
The S&P; climbed 16.68, or 1.4 percent, to 1,244.78, and the Nasdaq jumped 43.22, or 2.0 percent, to 2,251.27.
The Dow Jones industrial average rose 126.92, or 1.4 percent, to 9,311.19, after coming within 45 points of its Nov. 23 high.
Elsewhere on the broad market, the Russell 2,000 index of small-cap stocks edged up 0.83, to 422.09; the Wilshire 5,000 index jumped 124.67, to 11,430.87, also a record; the American Stock Exchange composite index advanced 8.60, to 692.21; and the S&P; 400 midcap index added 1.34, to 390.38.
The Sun-Bloomberg Maryland index of the top 100 Maryland stocks slipped 0.17, to 196.31.
Seventeen stocks rose for every 14 that fell on the New York Stock Exchange. Volume on the New York Stock Exchange totaled 784 million shares, above the daily average of 721 million for the past three months.
Microsoft, the world's biggest software maker, gained $5.50, to a record $146.50, after analyst Michael E. Stanek at Lehman Brothers said the stock could rise to $185 in the next 12 months, a 30 percent increase. Its earnings are likely to grow 32 percent in fiscal 1999, Stanek said.
MCI WorldCom climbed $5.0625, to $74.9375. Analyst Jack B. Grubman at Salomon Smith Barney said the No. 2 U.S. long-distance company is likely to post earnings growth of 48 percent a year for the next two years, and 28 percent annually through 2004.
The companies in the S&P; 500 are expected to post operating earnings growth of 18.5 percent this year.
Both stocks surged last year; Microsoft rose 115 percent and MCI WorldCom gained 137 percent.
Among other technology stocks, International Business Machines Corp. rose $6.625, to $189.625; Oracle Corp. gained $1.3125, to $44.3125; and semiconductor equipment maker Novellus Systems Inc. surged $6.5625, to $58.5625.
Tellabs Inc. jumped $13.0625, to $78.8125, and Northern Telecom Ltd. climbed $5.875, to $56.875.
Amazon.com Inc. rose $6.1875, to $124.50, rebounding from a $11.8125 drop, after the No. 1 online bookseller said fourth-quarter sales nearly quadrupled to $250 million as more holiday shoppers ordered from its online stores in the United States and overseas. Amazon, whose 3-for-1 stock split took effect yesterday, was the most active stock in U.S. trading.
AirTouch Communications Inc. jumped $7.125, to $75.375, after Vodafone Group PLC said it is in talks to buy the world's largest independent mobile phone service company. Vodafone offered more than $45 billion, topping a bid from Bell Atlantic Corp., which rose $3.0625, to $55.
AMR Corp.'s American Airlines and Alaska Air Group Inc. released better-than-expected traffic results for December, and their shares climbed, pulling other airlines stocks up. AMR gained $4.0625, to $64.0625; Alaska Air surged $3.4375, to $46.875; Delta Air Lines Inc. added $2.5625, to $54.50; and UAL Corp., parent of United Airlines, rose $3.9375, to $63.625.
Georgia-Pacific Group, which announced a price increase for uncoated paper, jumped $2.875, to $62.50. International Paper Co. gained 68.75 cents, to $42.8125; Boise Cascade Corp. added $1.8125, to $31.6875; and Union Camp Corp. rose $1.5625, to $65.6875.
Boeing Co., the world's biggest airplane maker, rose $2.3125, to $35.25, after it said it delivered 559 commercial jets last year and eliminated most of a backlog of finished jets held in storage for cash-strapped Asian airlines unable to pay.
Merrill Lynch & Co. surged $4.625, to $73.125, after Morgan Stanley Dean Witter & Co. analyst Henry McVey raised his recommendation on the country's biggest brokerage.
Starbucks Corp. dropped $1.875, to $52, on concern that slowing December sales at the nation's largest coffee retailer may signal weakness in 1999. The company said late Monday that sales at stores open at least a year rose 1 percent, lower than expected, in the five weeks that ended Dec. 27.
Oil and oil field service shares were the biggest decliners, as crude oil fell 3 percent on concern that a cold snap in the Northeast and Midwest will end. The freezing weather boosted demand for heating fuels.
Contract driller Trans-ocean Offshore Inc. fell $1.25, to $26.4375, Exxon Corp. fell 62.5 cents, to $72; and Royal Dutch Petroleum Co., the majority owner of Royal Dutch/Shell Group, fell 68.75 cents, to $48.875.
Pub Date: 1/06/99