FINANCIAL MARKETS : Tech Stocks Rally; Dollar Bounces Back

U.S. stocks closed mostly higher Thursday, led by a year-end rally in technology issues.

Meanwhile, the dollar gained ground after sliding on Wednesday on concerns about a potential U.S.-led rescue of Mexico.

Mexican stocks continued to rebound. But in Europe shares slumped as interest rates took a surprising jump.

On Wall Street, the Dow industrials eased 6.06 points to 3,833.43, but the blue-chips’ small losses masked gains in the broad market.

Winners topped losers by 1,164 to 1,086 on the New York Stock Exchange in moderate trading. And in the Nasdaq market of mostly smaller stocks, winners beat losers by 1,774 to 1,486.

The Nasdaq composite index, heavy with tech stocks, soared 7.07 points or 1% to 749.53.

“Clearly a handful of technology stocks are doing their own thing while the Dow stocks are cooling off,” said Trude Latimer, analyst at Ferguson, Andrews & Associates.

The tech rally was led by Intel, which zoomed 1 7/8 to 64 3/8 after Merrill Lynch raised its 1995 earnings forecast for the computer chip giant to $7.90 a share from $7.

In currency markets, the dollar rose to 1.553 German marks from 1.544 on Wednesday, and to 99.70 Japanese yen, up from 99.20.

Concern that the United States would become ensnared in Mexico’s financial problems caused the dollar to tumble on Wednesday. But on Thursday the plummeting peso stabilized, calming traders’ nerves.

The U.S. bond market, which was hurt by the falling dollar on Wednesday, closed largely unchanged. The 30-year Treasury bond yield held steady at 7.83%, showing no reaction to the latest government economic reports suggesting a slowing economy ahead.

Bonds didn’t fare as well in Europe: A surprise rise in bank lending rates in France, and a renewed pledge by British Prime Minister John Major to cut taxes, helped send bond yields surging.

The yield on the 15-year benchmark British government bond jumped to 8.65% from 8.43% Wednesday. In France, the 10-year government bond yield soared to 8.25% from 8.04%.

The rise in European yields slammed stocks there. London’s FTSE-100 index dropped 30.2 points to 3,065.6, Frankfurt’s DAX index tumbled 31.98 points to 2,077.03 and Paris’ CAC-40 index plunged 33.68 points, or 1.8%, to 1,894.15.

In Mexico City, however, the Bolsa index gained 73.34 points, or 3.1%, to 2,411.06 as bargain-hunters rushed in, betting that the country’s crisis will pass. Argentina’s key stock index rebounded 5.4% and Brazil’s jumped 3.8%.

Tokyo stocks also rallied, with the Nikkei-225 index gaining 87.45 points to 19,752.98, a two-month high.

Among U.S. market highlights:

* Tech stocks rising with Intel included Micron Technology, up 1 1/8 to 45 1/4 after Goldman, Sachs raised its earnings estimates; and Hewlett-Packard, up 1 7/8 to 102 1/8 after Smith Barney upgraded its rating to “buy” from “attractive.”

Also gaining: Compaq, up 7/8 to 40 1/8; Sun Microsystems, up 1 to 36 5/8; IBM, up 1 3/8 to 74 3/8; America On-Line, up 2 1/8 to 57 7/8; Ortel, up 2 1/4 to 26 1/4; and Lotus Development, up 1 3/4 to 41 1/4.

* Some retail issues rebounded from their selloff in recent days on disappointment over Christmas sales. Ann Taylor gained 2 5/8 to 34 1/2 and Gap added 1 to 30 1/2. But Stroud’s slumped 1 7/8 to 9 1/8.

* U.S.-traded Latin American stocks rising included Telmex, up 7/8 to 42 3/8; Coca-Cola Femsa, up 1 7/8 to 24 1/2; Grupo Sidek, up 1 1/8 to 10 1/2; and Brazil Fund, up 1 1/4 to 33 1/4.

Also, Citicorp surged 1 3/8 to 41 7/8. The banking giant’s shares had been battered on worries about its Latin American loans.

Elsewhere, in commodity trading, copper prices rose to their highest level in six years with economic recoveries in the United States, Japan and Germany fueling a rally that analysts say shows no sign of slowing.

Demand from Asia has also been boosted by the prolonged closure of the Philippines’ only copper smelter. The smelter was shut before the Christmas holiday because of typhoon damage, and it is not expected to reopen until next week.

Copper futures on New York’s Commodity Exchange set contract highs on most months, with March futures rising 0.15 cent to $1.38 a pound.

Since the beginning of the year copper has soared about 70%. Demand for the metal is forecast to grow more than 3% next year, and since no new mine or refinery output will be on stream until the second half of 1995, copper supplies should fall steadily, analysts say.