FINANCIAL MARKETS : Tech Shares Boost Stocks; Yields Drop

Stocks climbed Monday with a boost from technology shares, which lifted the Nasdaq stock market to a record close.

The advance came amid light volume, typical for late summer when many investors are on vacation.

The Nasdaq stock market--which is dominated by semiconductor, software and related computer stocks--surged 8.33 points to 1,012.44, a new high. It surpassed the peak of 1,010.66 points set on July 27.

The Dow Jones industrial average climbed 41.56 points to 4,659.86 after shedding nearly 100 points over the past two weeks. In the broader market, gainers led losers 1,238 to 938 on light volume of 262-million shares on the New York Stock Exchange.

“The volume was lackluster by recent standards,” said Steve Mindnich, vice president of listed trading at Jefferies & Co. “It’s easier to have exaggerated moves when there is less volume.”

But he said a range of stocks provided “tremendous leadership.”

Stability in the bond market, which kept interest rates in check, and a respectable performance by the dollar contributed to the rebound on Wall Street from last week’s slump.

Other popular indicators also advanced. The New York Stock Exchange composite index rose 1.98 points to 299.75 and Standard & Poor’s 500 increased 4.63 points to 559.74. The American Stock Exchange market value index added 2.14 points, rising to 523.94.

Gainers led the Big Board’s advance-decline tally by about 4 to 3.

The stock market headed higher right from the start when bonds responded favorably to a Commerce Department report that business inventories edged up just 0.2 percent in June, the smallest growth in 15 months.

Inventory fluctuations are followed closely by economists who try to determine whether businesses need to expand or contract production to meet anticipated demand.

Weak sales this past spring were expected to cause companies to try to keep stockpiles as lean as possible. But the threat of a buildup was feared because it could have forced business to scale back output.

The bond market turned up in reaction to the inventory data after showing neutral readings in the early going. The price of the Treasury’s main 30-year bond increased 5/16 point, or $3.13 per $1,000 in face value. Its yield, which moves in the opposite direction, fell to 6.95% from 6.97% on Friday.

Meanwhile, in New York, the dollar was quoted at 93.65 yen, down from 93.85 Friday. Gold prices were steady, up 60 cents in New York to $384.10.

“The market really felt very strong from the opening this morning and never gave anything back,” said Mindnich at Jefferies & Co.

Although encouraging, Mindnich said low volume rubbed some of the luster off the market’s advance.

Among Monday’s highlights:

* Gainers among the blue chips included Walt Disney, which pleasantly surprised Wall Street by naming Hollywood agent Michael Ovitz as its president. Ovitz will oversee Disney’s theme parks, movies and consumer products, plus Capital Cities/ABC when that merger is complete. Disney jumped 2 1/2 to 59.

* Merger news provided a buying incentive. Among stocks bid up due to takeover announcements were National Convenience Stores, which surged 5 3/8 to 19 1/8 on the NYSE following word that its board was evaluating an offer from Circle K.

* PP&L; Resources climbed 2 5/8 to 21 5/8 after getting an unsolicited $24-a-share, or $3.8-billion, bid from PECO Energy, whose shares fell 1 to 26 3/4.

* Cipsco rose 2 7/8 to 32 1/2 after it agreed to merge with Union Electric in a deal valued at $1.2 billion. Union Electric fell 1/2 to 34 7/8.

* CBS rose 1 to 79 1/8 after it was widely reported that Turner Broadcasting had talked with Microsoft about an investment in Turner that would allow Turner to bid for CBS. Westinghouse recently agreed to buy CBS for $5.4 billion. Turner shares added 2 1/8 to 23 5/8.

* Technology stocks posting gains included Microsoft Corp., up 2 1/4 to 98 3/4, Sun Microsystems, up 4 1/4 to 52 1/4, IBM, up 1 1/2 to 110 3/4, Micron, up 2 1/2 to 65 3/8, and Texas Instruments, up 4 1/4 to 153 3/4.

A.C. Moore, senior investment strategist at Dunvegan Associates, said the overall market is “still drifting and consolidating. The concentrated move today in technology stocks is still pretty narrow and reflects recent weakness.”

* Integrated Silicon Systems jumped 14 7/8 to 61 5/8 after it agreed to merge with ArcSys in a stock swap deal. ArcSys added 7/8 to 45 5/8.