U.S. stocks rose for a second day Thursday as Ford Motor Co. drove up other auto stocks and a host of technology and financial companies reported better-than-expected earnings. The market also got a boost from government reports showing little risk of inflation.
Texas Instruments, J.P. Morgan, PaineWebber Group and Student Loan Marketing Assn. posted surprisingly strong profits for the latest quarter, suggesting that while earnings growth may be slowing, it isn't ending.
"Earnings will hold up," said Gail Bardin, a money manager at Hotchkis & Wiley, which manages assets of $7 billion in Los Angeles. "You have low interest rates, low inflation and companies that are very competitive."
The Dow Jones industrial average, up 14.45 points on Wednesday, climbed 29.63 points to 4,764.88, led by J.P. Morgan, General Motors and AT&T.;
Advancing issues led decliners by about 11 to 6 on the New York Stock Exchange. Big Board volume was moderately heavy at 344.07 million shares, up from 340.72 million Wednesday.
Bond yields ended the day at the lowest point since early last year. They rose initially after the Commerce Department said wholesale prices climbed 0.3% in September, the first advance in four months and the largest since January. But the increase was viewed as temporary, reflecting weather damage to crops.
Yields turned around after reports that the Federal Reserve Bank of Atlanta's index of area business activity declined in August. Also, the Labor Department said first-time unemployment claims rose by 6,000 last week, but the four-week moving average, which many analysts view as more reliable, fell 4,000 to 347,750.
The yield on the Treasury's main 30-year bond ended the day at 6.39%, down from 6.43% on Wednesday.
The dollar weakened against leading currencies Thursday, weighed down by renewed buying interest in the German mark and Japanese yen. In late New York trading, the dollar ended at 100.18 yen, down from 101 on Wednesday. It fell to 1.4185 marks from 1.4260 and to 1.1465 Swiss francs from 1.1495. The dollar weakened to 4.9475 French francs from 4.9670.
The stock market's advance Thursday included a strong showing from technology shares, which pushed broad market indexes higher. The NYSE's composite index rose 1.86 points to 312.37. The Standard & Poor's 500-stock index rose 3.64 points to 583.10. The Nasdaq composite index rose 14.06 points to 1,015.63.
Investors, expecting the worst from third-quarter earnings reports, had bid stocks sharply lower earlier in the week.
But the earnings picture is "coming out right about where it was anticipated, maybe a tiny bit better," said Don Hays, director of investment strategy at Wheat First Butcher Singer in Richmond, Va.
"There's been a little recall from that extreme negativism, and I suspect that will last for two to three weeks."
Ed Keon, a spokesman for IBES International, said that with about 10% of the companies it tracks having reported, upside earnings surprises were running at about 2 to 1 over downside surprises.
Among market highlights:
* Microsoft added 1 to 87 5/8 in Nasdaq trading, extending Wednesday's gains, after Chairman Bill Gates said sales of the company's new Windows 95 operating system have been better than expected. Kent Electronics jumped 4 3/4 to 45 3/4 on unexpectedly strong earnings.
* Among financial issues, J.P. Morgan shares rose 2 1/2 to 80 5/8, after the banking company reported third-quarter net earnings of $1.78 per share, up from $1.63 last year, on an 81% rise in corporate finance revenues. PaineWebber shares rose 1 3/4 to 21 3/8, after the brokerage reported a surprising rise in third-quarter net earnings to 71 cents per share from 27 cents a year ago.
* Ford rose 1 7/8 to 31 7/8 in leading volume of 8.26 million shares on the Big Board, after it increased its quarterly dividend by 13%, to 35 cents a share from 31 cents. General Motors shares rose 1 5/8 to 46 7/8 and Chrysler added 1 3/4 to 54 1/2.
* Russell lost 2 3/4 to 23 1/4. The clothing maker said its quarterly earnings will be 50% below a year ago.
* Dayton-Hudson rose 3 1/8 to 75 3/8. Piper Jaffray upgraded the stock to "strong buy" from "market perform."
* In overseas stock markets, the Nikkei-225 index in Tokyo rose 0.45%, the FTSE-100 index in London added 1.42%, and Frankfurt's DAX index advanced 0.6%.
Copper prices rose amid speculation about the fate of Southern California warehouse stocks, and a general push to cover short positions in a downtrending market.
The copper market at New York's Comex was swept by rumors that a large buyer had bought up copper stocks held at the Long Beach warehouse that serves as a delivery point for the London Metal Exchange.
William O'Neill of Merrill Lynch said the talk served as a catalyst for a market showing signs of breaking a downtrend. Copper prices hit a five-month low Wednesday and have lost 14% of their value since June.
Market Roundup, D6