Stock Market Rally Back On Track

Strength in technology and airline issues defied sluggish bonds to push stocks higher, and broad-market indexes marked record highs for the second consecutive session.

The Dow Jones industrial average rose 13.73 to close at 4,683.61, well below its all-time closing high of 4,736.29 made on July 17.

But broad-market indexes climbed to new highs, boosted by merger news.

The head trader of one Midwestern brokerage firm, who did not wish his name used, said stocks are not rising so much on fundamental news as they are building momentum as money pours into stock mutual funds.

“Mainly there’s just a lot of pressure to put money to work,” the trader said. “Any time you get any kind of selling, the buyers come right back in.”

On the Big Board, advancing issues led decliners by about 11 to 8. Big Board volume was moderate at 300.9 million shares as of 4 p.m., down from 332.66 million on Tuesday.

Some of the stocks that moved substantially Wednesday:

NYSE

USAir Group rose 7/8 to 10-5/8.

The stock added to gains made on Tuesday, after the airline said it would report a pretax profit this year. S.G. Warburg upgraded the stock on Tuesday to “buy” from “hold.”

Nationsbank rose 5/8 to 61-1/2.

Nationsbank agreed to buy Bank South for $1.59 billion in stock, in the latest of a series of bank mergers. Bank South shares were down 1/16 point at 25-3/8 in Nasdaq trading.

PNC Bank Corp. rose 3/4 to 27-1/2.

Lehman put the stock on its “recommended” list following a jump in banking issues tied to consolidation in the banking industry.

NASDAQ

Xylogics rose 11-7/8 to 48-7/8.

Bay Networks fell 1-3/8 to 48-7/8.

The stock shot to a 52-week high after Bay Networks Inc. agreed to acquire Xylogics, in a stock swap valued at about $330 million.

Dell Computer rose 4-1/2 to 85-1/4.

Intel fell 1-3/16 to 62-1/2.

Dell on Tuesday introduced six low-priced computer systems based on Intel’s Pentium processor.

AMEX

Turner Broadcasting “A” shares rose 1/8 to 29-1/8.

Turner Broadcasting “B” shares fell 1/8 to 29-1/4.

Merger talks with Time Warner are continuing, with Tele-Communication’s Chairman John Malone, a key Turner shareholder, escalating his demands.