Retail, Tech and Energy Stocks Lead Market Up
Another broad rally pushed Wall Street higher Tuesday, with small-stock indexes again setting record highs.
Gains in retail and technology shares, in particular, helped pace the small-stock market, as the Nasdaq composite index of mostly smaller issues rose 13.26 points, or 1.2%, to a record 1,166.76.
The Russell 2,000 index, composed exclusively of smaller stocks, rose 0.7% to a record 343.52.
Among blue-chip indexes, the Dow Jones industrials were up 23.85 points to 5,588.59, still 100 points below the record 5,689.74 set April 3.
Winners outnumbered losers by 13 to 10 on the New York Stock Exchange and by 21 to 17 on Nasdaq.
Optimism about the U.S. economy’s growth potential this year--and thus future corporate earnings growth--was boosted by Digital Equipment’s first-quarter earnings report. The company reported higher-than-expected profit margins, as healthy returns on its high-end computers offset lower demand for its personal computers.
Digital’s earnings triggered another buying spree among tech shares in general.
Meanwhile, retail stocks rallied after Johnson Redbook Service, which tracks retail sales, reported surprisingly hefty sales gains last week for many store chains.
And oil stocks gained, responding to higher crude oil prices and to better-than-expected first-quarter earnings reported Monday by major oil companies.
Meanwhile, the bond market was fairly calm, although yields edged up for the first time in three sessions as the Treasury sold $18.75 billion of new two-year notes at a yield of 5.939%.
Traders said demand for the notes was fairly strong, with Treasury receiving $2.54 in bids for every $1 in notes offered, up from an average $2.41 in bids at the last 10 auctions of two-year notes.
The government will auction new five-year notes today.
Among longer-term securities, the 30-year Treasury bond yield rose to 6.77% on Tuesday from 6.74% on Monday.
Analysts said stocks’ continuing rally--and especially the focus on small-company stocks--suggests that many investors are paying close attention to corporate earnings gains and much less attention to the bond market’s gyrations.
Among Tuesday’s highlights:
* In the tech group, Digital’s shares soared 5 1/4 to 60 5/8. Other gainers included Xylan, up 3 3/4 to 70; Compaq, up 1 1/2 to 43 7/8; Sun Microsystems, up 4 3/8 to 54 3/8; Cabletron Systems, up 2 5/8 to 71 3/4; and BMC Software, up 2 3/8 to 60 1/8; and data-storage-device firm Iomega, which soared 10 5/8 to 51 7/8.
* Retail stocks moving higher included Federated Department Stores, up 1 3/8 to 33 3/8; Dayton Hudson, up 2 to 93; Woolworth, up 1 1/4 to 19 3/4; Gap, up 1 3/8 to 29; and Ross Stores, up 1 13/16 to 34 9/16.
Other retail-related gainers included clothing firm Mossimo, up 2 5/8 to 35 1/4; and sunglass-maker Oakley, up 3 to 42 7/8.
* In the energy sector, Exxon jumped 2 5/8 to 84 5/8, Chevron rose 1 7/8 to 57 5/8 and Texaco surged 1 3/4 to 85 5/8. Their gains were mostly responsible for the Dow index’s advance.
* On the downside Bell Atlantic fell 1 to 66 1/4 and Nynex was off 1 1/8 to 49 3/8 in the second day of trading after their merger announcement.
* Telmex, the Mexican phone monopoly, dropped 1 1/8 to 36 in NYSE trading after the company reported slower-than-expected first-quarter revenue growth. The report put a damper on the recently high-flying Mexican market: The Bolsa index sank 33.37 points, or 1%, to 3,217.86.
In U.S. commodities trading, crude oil prices surged 5% as traders bet negotiations to allow a $2 billion sale of Iraqi crude oil are faltering. Elsewhere, wheat and corn continued to rocket on fears of crop damage from dry Midwest weather.
