FINANCIAL MARKETS : Dow Gains 41 as Tech Shares Rally
Stocks climbed Monday with a boost from technology shares, which lifted the Nasdaq stock market to a record close.
But trading was light, typical for a summer Monday, so some analysts were reluctant to read much into the advance.
The Dow Jones industrials, which had fallen 65 points last week as investors’ interest in the market waned, rebounded 41.56 points to 4,659.86.
The Dow was boosted by shares of Walt Disney, which jumped 2 1/2 to 59 after announcing that Hollywood super-agent Michael Ovitz will come aboard; and by Caterpillar, which gained 2 5/8 to 66, rallying back after a recent steep selloff.
On the Big Board, rising stocks outnumbered losers by 12 to 9. But volume was just 265 million shares.
“The volume was lackluster [even] by recent standards,” said Steve Mindnich, vice president at Jefferies & Co. “It’s easier to have exaggerated moves when there is less volume.”
Even so, analysts said the return of technology stocks to a position of market leadership was a good sign.
A jump in key tech shares pushed the Nasdaq composite index up 8.33 points to 1,012.44, a new record, surpassing the previous peak of 1,010.66 set on July 27.
Another measure of smaller stocks’ performance, the Russell 2,000 index, also hit a new high, rising 1.19 points to 300.27.
Stability in the bond market, which kept interest rates in check, contributed to the rebound on Wall Street from last week’s slump.
Bond yields closed modestly lower after rising sharply last week. Traders said some investors were bargain-hunting as yields hovered near three-month highs.
The yield on the 30-year Treasury bond eased to 6.95% from 6.97% on Friday.
In currency trading, the dollar eased in a quiet session as traders took profits from last week’s strong rally. The dollar closed at 93.65 yen in New York, down from 93.85 Friday, and at 1.434 German marks, versus 1.438 Friday.
Among Monday’s highlights:
* Technology stocks posting hefty gains included Microsoft, up 2 1/4 to 98 3/4; Sun Microsystems, up 4 1/4 to 52 1/2; IBM, up 1 1/2 to 110 3/4; Micron Technology, up 2 5/8 to 65 1/2; and Texas Instruments, up 4 3/8 to 153 7/8.
* Many telecommunications stocks also were winners. Qualcomm surged 2 1/4 to 48, America Online rose 2 1/2 to 64 7/8 and 3Com soared 3 7/8 to 74 1/8.
* Industrial stocks rebounding with Caterpillar included Kodak, up 1 3/8 to 60 1/4; AlliedSignal, up 1 1/8 to 45 5/8; TRW, up 1 3/8 to 77 1/4; and Chrysler, up 7/8 to 52 1/8.
* CBS rose 7/8 to 79 on news reports that Turner Broadcasting has talked with Microsoft about an investment in Turner that would allow Turner to bid for CBS.
Turner Class A shares shot up 2 1/8 to 23 5/8 on the reports. Westinghouse, which currently has an agreement to buy CBS for $5.4 billion, eased 1/4 to 13 3/4.
* Elsewhere on the takeover front, National Convenience Stores shares surged 5 3/8 to 19 1/8 on the NYSE following word that its board was evaluating an offer from Circle K. Circle K has offered $17 a share in cash.
* On the down side, Coram Healthcare was the most actively traded U.S. stock and plunged 4 1/2 to 5 1/4. The home health care company reported a second-quarter loss that put its future in doubt.
In foreign trading, Tokyo’s 225-issue Nikkei index rose 124.23 points to 16,916.57.
But Latin American markets weakened. The Mexican market’s Bolsa index lost 10.83 points to 2,521.82. And in Chile, the battered IPSA index slumped again, falling 2.83 points to 96.03.
In commodities markets, cotton and soybean prices rose as worries about hot weather and pests sparked a surge of buying by speculators.
Corn and orange juice also rose, helping the Knight-Ridder Commodity Research Bureau Index of 21 futures prices to finish the day at 234.70, up 1.22 points.
At the New York Cotton Exchange, contracts for October through July deliveries ended locked up the 2-cent daily limit at the close, with December at 74.35 cents a pound.
The rally followed through on Friday’s buying after the latest government crop estimate last week, but also was fueled by worries about rains in Texas and crop pests in the Southeast.
Also rising Monday: Silver futures, with the August contract rising 13.7 cents to $5.34 an ounce.
Traders say the silver market is increasingly concerned that supplies are tightening, though many analysts say global industrial demand isn’t strong enough to cause tight supplies.
Market Roundup, D10
