Techs Again Lead Stocks to Records
Stocks set more records Tuesday on Wall Street as still more investors were lured by the siren call of technology shares.
“We’re watching this market with wonderment rather than nervousness,” said Arthur Cashin, a managing director of New York Stock Exchange floor operations for PaineWebber. “We’re in awe.”
The Dow Jones industrial average soared 52.02 points, or 0.96%, to 5,459.61 and set its ninth record closing high for 1996. In the broader market, advancing issues led declines 1,376 to 931 on very heavy volume of 465 million shares on the NYSE.
Bellwether Dow component International Business Machines Corp. rose 2 1/2 to 114 7/8--trading at its highest levels since early 1991.
The technology-laden Nasdaq Composite index advanced to its third consecutive record, gaining 5.74 points to 1,089.08.
The Standard & Poor’s composite index of 500 stocks jumped 4.90 to 646.33, its sixth record closing high for the year.
“Many high-tech stocks are up 20% to 30% in the last three weeks. You’re beginning to get a buying orgy,” said Alfred E. Goldman, vice president at A.G. Edwards & Sons Inc. in St. Louis. “High techs were severely sold out, creating attractive buying opportunities. Some of them have superior earnings prospects compared with the domestic economy.”
Stronger technology stocks included Micron, up 4 1/8 to 41 7/8, Texas Instruments, up 1 5/8 to 54 3/4, Hewlett Packard, up 1 3/8 to 90 1/2, and Intel, up 1 to 59 1/2.
Frank Gretz, a technical analyst at Shields & Co., said he remained wary about the rally in technology stocks.
“I think this is a rally to sell into.” Gretz said he did not expect technology stocks “to go down a lot, but they may go sideways for four to six months.”
Meanwhile, the Treasury’s sale of $18.5 billion in three-year notes lived up to investors’ high expectations, giving the both the bond and stock markets a lift.
The yield of the Treasury’s main 30-year bond fell to 6.13% from 6.15% late Monday.
Among market highlights:
* Baxter International rose 1 1/2 to 42 3/8. Baxter said it believed its bid for W.R. Grace’s National Medical Care unit was superior to a rival bid from Germany’s Fresenius. Grace rose 1/4 to 70 1/8.
* WMX Technologies lost 1 to 29. It said its fourth-quarter earnings fell to $49.7 million from $206 million a year ago.
* Engelhard shed 3 to 21 1/8. It posted strong fourth-quarter earnings but said its PremAir smog-eating catalysts need significant work to become commercially viable.
* Broderbund tumbled 7 1/8 to 46 after warning late Monday second-quarter results would fall short of Wall Street expectations. Cowen and Robertson Stephens cut their ratings.
* Oxford Health surged 11 3/8 to 76 3/8 after reporting a 71% jump in quarterly earnings.
* Documentum, a developer of document management software products, jumped 6 to 30.
* Xerox rose 5 1/8 to 130 7/8 after it announced plans to buy back up to $1 billion in common stock.
The dollar edged higher against major currencies Tuesday after halting a furious speculative attack Monday. The dollar rose to 1.4712 marks late Tuesday from 1.4675 at Monday’s close and inched higher to 105.25 yen from 105.20.
Oil and natural gas prices rebounded on forecasts for colder weather but the rise was muted by worries of renewed supplies from Iraq. March crude oil rose 15 cents to $17.69 a barrel, March heating oil edged up 0.04 cent to 51.64 cents a gallon, March gasoline firmed 0.32 cent to 52.38 cents a gallon.
Natural gas prices surged on stronger cash prices at the Gulf of Mexico. Many gas suppliers have to repay gas borrowed during the record cold last week. March natural gas jumped 28 cents to $2.448 per million British thermal units at the New York Mercantile Exchange.
