FINANCIAL MARKETS : Indices Set New Records as Technology Stocks Rise

Wall Street stocks charged higher Thursday and fresh gains in technology shares boosted several indexes to record highs. Corporate earnings reports continued to come in strong and soft economic data pushed interest rates lower.

Investors continued to pour money into stock funds, despite a sharp decline of more than 67 points in the Dow Jones industrial average last week.

Last week’s market rout is turning out to be “nothing but a sneeze,” said Edward Collins, head stock trader at Daiwa Securities America.

“Last week taught people not to sell stocks,” said Timothy Strauss, manager of institutional sales at Hancock Institutional Services. “If you panicked last week and sold, you feel foolish because you can’t get back into your position.”

The Investment Company Institute reported this week that investors put $7.9 billion into equity funds that primarily invest in U.S. stocks in June, up from May’s $7.1 billion.

The Dow industrials briefly hit 4,741.56 before settling back toward the end of the day, closing up 25.71 at 4,732.77, just 5 points shy of the all-time closing high made on July 17.

Broad-market indexes broke through records as computer stocks again muscled higher.

Advancing issues led decliners by about 7 to 4 the New York Stock Exchange. Big Board volume came to 355.15 million shares as of 4 p.m., down from 373.16 million on Wednesday.

“Earnings continue to be positive,” noted John Church, chief investment officer of Glenmede Trust Co. in Philadelphia. “The economy looks like it’s going toward the best case of soft landing or no landing. It’s continued growth without inflation. The Federal Reserve has done its job in keeping interest rates in line, and stock valuations aren’t too high. All of that adds up to a very powerful market.”

The NYSE composite index rose 1.86 to 302.13, topping its previous record close of 300.01. The Standard & Poor’s 500 list was up 3.61 to 565.22, surpassing its previous high of 562.72. The American Stock Exchange’s market value index was up 0.96 to 521.58, above its previous high of 518.99.

The Nasdaq composite index, which includes many computer and other technology stocks, climbed 10.48 to 1,010.66, breaking its previous record of 1,005.89.

The 30-year Treasury bond yield was at 6.83%, down from a close of 6.88% on Wednesday. The dollar was firmer early in the day and closed mixed.

The stock and bond markets, as well as the dollar, rose at the openings after the Commerce Department said that orders to manufacturers for expensive items fell 0.1% in June. Economists had expected the number to rise slightly.

The slower-than-expected durable-goods number indicated that the economy may not be growing at an inflationary rate. That gave hope to bond investors who wish to see another credit easing by the Federal Reserve as soon as August.

Among market highlights:

* Technology shares, especially those of computer companies, were again the stars.

On the Big Board, IBM rose 1 3/4 to 110 3/4. Cirrus Logic climbed 1 47/64 to 45 55/64 in leading volume in Nasdaq trading, followed by Intel Corp., up 5/8 to 68 3/8; Novell, up 1/8 to 18 3/8; Chipcom, which surged 7 1/2 to 37 1/4 after the company got a buyout offer, and Quarterdeck, up 2 5/8 to 14 7/8.

Chipcom shares soared after 3Com Corp., a leading seller of computers and components used in business data networks, offered to buy Chipcom in a $775 million stock deal. 3Com’s shares fell 2 1/8 to 73 1/2 in Nasdaq trading.

* Airline stocks rose in sympathy with Delta Air Lines, whose shares climbed 1 1/8 to 80 1/2. Delta said its fourth-quarter net income was $4.49 per share, compared with a loss of $5.50, including a special charge, a year ago. Analysts had been expecting Delta’s earnings to be about $3 per share at most.

* Union Pacific rose 1 1/2 to 62 7/8. Its board approved an initial public offering of Union Pacific Resources common stock. U.S. Surgical fell 2 1/2 to 24 after Morgan Stanley downgraded the stock, market sources said.

Overseas stock markets ended mixed. The Nikkei index in Tokyo rose 1.45%, but the FT-SE 100 in London and Frankfurt’s DAX index both fell.

Coffee prices changed course and turned abruptly lower Thursday as doubts began to emerge about the ability of producing nations to hold the line on exports.

Prices fell back to the levels at which they traded before the producing nations initialed a pact to limit exports in an effort to boost sagging global prices.

In trading on the Coffee, Sugar and Cocoa Exchange, coffee prices erased Wednesday’s gains that followed an agreement among countries representing 80% of the world’s coffee production.

The agreement initiated by Latin American producers and joined by African and Asian growers called for an export cap of 60 million 132-pound bags over the next 12 months.

But selling developed because of doubts about discipline among the members of the coffee group who might try to subvert the quotas to profit from higher prices. In addition, traders were discouraged by the lack of buying by roaster companies, viewing their absence as a sign that professional coffee traders believe prices could still fall.

September coffee fell 4.7 cents to 147.6 cents a pound.