Stocks Gain; Dow Surges Back Above 11,000 Mark

Stocks soared Thursday as Microsoft, Cisco Systems and General Electric, the market’s biggest companies, propelled the Standard & Poor’s 500 index to its third-straight record and the Dow climbed back above 11,000.

Microsoft led the major indexes higher as investors wagered that the software giant will settle its antitrust case with the government. Cisco, the biggest maker of computer-networking equipment, soared after splitting its stock for the eighth time in as many years.

“It’s a day of individual events, with the largest companies gaining on perceived favorable” announcements, said Joseph Williams, a money manager at Commerce Bank in Kansas City, Mo.

The Dow Jones industrial average advanced 253.16 points, or 2.3%, to 11,119.86, its first close above 11,000 since Feb. 3. The broader S&P; 500 climbed 26.71 points, or 1.8%, to 1,527.35. More than three stocks rose for every two that fell on the New York Stock Exchange.

The Nasdaq composite gained 75.86 points, or 1.6%, to 4,940.61.

The major indexes’ gains over the last week may have spurred some money managers to “window-dress” their portfolios--or buy the recent big gainers before investors scrutinize their performance at the quarter’s end, according to Robert Bloom, chief investment officer for Friends, Ivory & Sime.

Treasury yields declined after the Clinton administration said it backs legislation to reduce government support of the nation’s largest mortgage lenders, sending investors into the safety of bonds.

The benchmark 30-year Treasury yield dropped to 5.91%, from 5.96% the day before, settling at its lowest level since Aug. 26.

Among the equity highlights:

* Microsoft, the biggest stock by market value, zoomed $8.63 to $111.88. Cisco advanced $5.63 to $77.81 as retail investors flocked to the shares after its 2-for-1 split took effect. GE raced $9.13 to $160 as the conglomerate was raised to “buy” from “outperform” by Lehman Bros., which set a $200 target.

* Industrial blue chips rallied as fund managers scrambled to put their cash to work before the first quarter closes at the end of next week. Aluminum maker Alcoa gained $2.63 to $69.50 and International Paper rose $1.88 to $39.13.

* Intel eased $1.44 to $142.63 as investors bet the stock’s 22% climb in the previous six sessions was overdone given even the most optimistic profit outlook.

Among other chip stocks, Micron Technology skidded $6.38 to $134.63 and Rambus lost $13.75 to $336.63.

* Compaq Computer slipped $2.38 to $29.88 amid speculation that first-quarter sales might fall shy of analysts’ expectations.

* Amgen slumped $4.06 to $57.69 after the Thousand Oaks biotech company was downgraded to “accumulate” from “buy” by Merrill Lynch. Amgen is fighting a patent dispute with Transkaryotic Therapies to keep that company’s rival to the drug Epogen off the U.S. market, a battle Merrill said poses significant “downside risk” to the stock.

Elsewhere in the rocky biotech sector, Biogen sank $5.38 to $76.13 after it lost a bid to get higher royalty payments from Schering-Plough.

Incyte Pharmaceuticals slipped $13.06 to $111.19 even as it announced an expanded Internet program for its genetic research. Incyte’s shares more than quadrupled in the first two months of the year.

But Carlsbad-based Immune Response bucked the trend, rocketing $4.69 to $15.69 after it said its lead AIDS drug, Remune, performed well in a study.

* Paper stocks rose after Merrill Lynch said the industry is “poised for a spring rally.” Boise Cascade climbed $1.44 to $31.88, International Paper gained $1.88 to $39.13 and Mead added $1.06 to $33.38.

* Several brokerage stocks surged to records, including Morgan Stanley Dean Witter, up $4.61 to $94.75; Lehman Bros. Holdings, up $8.88 to $101.75; and Merrill Lynch, up $5 to $109.94.

Online leader Charles Schwab rose $3.69 to $61.25.

* Bank stocks continued their ascent, as analysts said investors may be betting that the Fed will raise interest rates only modestly this year. Chase Manhattan gained $6.94 to $98.50, State Street jumped $7.94 to $100.44 and Bank One climbed $1.63 to $28.75.

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Market Roundup, C5