The S&P; 500 set another new high and the Dow industrials rose to just shy of 9,000 on Monday as a late-quarter push into the most popular blue-chip stocks continued.
Meanwhile, bond yields edged up, and the dollar was mixed in quiet pre-holiday trading.
The Dow rose 52.82 points to 8,997.36, coming within a hair of posting its first close above 9,000 since June 9.
The Standard & Poor's 500 index closed at a new high for the third time in four sessions, rising 5.29 points to 1,138.49.
The red-hot Nasdaq composite index rose 21.55 points, or 1.2%, to 1,891.08 as the technology group extended a powerful two-week rebound.
Winners topped losers by 18 to 11 on the New York Stock Exchange on Monday and by 22 to 19 on Nasdaq.
With the second quarter--and the first half of 1998--coming to a close today, the Dow is up 13.8% for the year, the S&P; 500 is up 17.3% and the Nasdaq composite is up 20.4%.
"There is a general feeling that we can survive this, and that Asia will be major for the Asians but minor for us," said Alfred Goldman, analyst at A.G. Edwards & Sons.
"There is generally a more comfortable feeling about Asia," Goldman said. "That is bringing a sigh of relief, plus we have end-of-quarter 'window-dressing' buying" to spruce up portfolios.
As the quarter ends, money managers are ditching weaker stocks and buying stronger names in a last-minute bid to improve the quarterly performance of their portfolios, analysts said.
Other analysts noted, however, that the broader U.S. market remains well below its spring highs. The Russell 2,000 index of smaller stocks declined sharply in May, and at 453.83 on Monday still is 7.6% below its 1998 record high.
Some analysts say investors are less nervous about second-quarter corporate earnings--even though they're expected to be weak--because many of the companies expected to post the biggest disappointments in earnings have already telegraphed that fact.
"We are through the pre-reporting period and the bad news is behind for this quarter," said Arthur Hogan, chief market analyst at Jefferies & Co.
Overnight, Asian markets--which have suffered deep declines again this quarter--were mixed.
Japanese politicians are drawing up plans to clear up bad loans held by financial institutions in a bid to keep healthy banks afloat when other banks failed.
The dollar lost ground against the Japanese yen Monday, falling to 141.69 yen in New York, down 0.75 yen. President Clinton's visit to China has helped allay fears of any competitive devaluation by China in the face of the struggling Japanese yen, traders said.
Bond yields edged up, though traders said there was little fear on Wall Street that Federal Reserve Board policymakers, due to meet today and Wednesday, will raise interest rates.
"The Fed's hands are more or less tied. You have no inflationary threat and the Asian crisis continues," said Steven Goldman, market strategist at Weeden & Co. in Greenwich, Conn.
Among Monday's highlights:
* The Morgan Stanley high-tech index rose for the fourth time in seven days as computer stocks recovered from losses earlier in the second quarter caused by falling prices and slowing demand.
Microsoft rose $3 to $107.44, IBM gained $1.13 to $114.13, Dell jumped $1.75 to $94.13 and Cisco Systems rose $1.94 to $91.81.
Also, Compuware leaped $2.88 to $49.75 and Computer Sciences surged $2.31 to $64.75.
* Semiconductor stocks were the exception. Most fell after Intel cut prices on its chips for laptop computers by as much as 37%. Analysts said the world's largest chip maker might slash prices further in the next few months, which could jeopardize second-half earnings. Intel dropped 56 cents to $75.81.
* AT&T; edged up 19 cents to $56.94, halting its steep decline since announcing a $46-billion takeover of cable TV giant Tele-Communications Inc. last week.
* Entertainment stocks were higher as News Corp. surged $3.56 to $33.06 on news that it will sell the public a stake in its entertainment assets. Disney rose $2.69 to $113.19 and Univision gained $1.38 to $34.75.
* In the Internet sector, America Online fell $4.50 to $103.25. The company said it will sell $500 million of new stock.
* Investors are still quick to punish companies that warn of earnings shortfalls: Ikon Office Solutions tumbled $6.75 to $15.31 after the seller of photocopiers, fax machines and other office equipment said earnings for its fiscal third quarter will be "significantly below" the First Call Corp. estimate of 34 cents a share. Ikon didn't say why.
And Cash America International Inc. fell $4.56 to $15.63 after the pawnshop chain said second-quarter earnings will be half the 12 cents a share in the year-ago period because of higher costs for a new automated check-cashing machine.
* Paper stocks fell on concern that slowing economies around the world will reduce demand for forest products. While companies are cutting the rate at which they open new paper plants, consumption is falling faster, Merrill Lynch & Co. analyst Sherman Chao said in a report to clients.
He cut his 1998 earnings forecasts on several paper companies and introduced 1999 estimates that are below the Wall Street consensus. International Paper dropped $1 to $42.88 and Union Camp fell 81 cents to $49.38.
Market Roundup, D22