Improved Inflation Outlook Lifts Stock Market
The Nasdaq market and the Russell 2000 closed at record highs for the 10th straight session Wednesday as renewed fervor for technology and more speculative issues regained momentum.
The broad market rose after a new report indicated a slower pace of economic growth, allaying fears about inflation. But the gains were modest again, and trading remained restrained ahead of a pivotal report on April employment.
The Dow Jones industrial average rose 6.14 points to 5,575.22 - the fourth straight move of less than 10 points for the sluggish barometer of big U.S. companies. The Dow was up as much as 25 points in the afternoon after rebounding from a loss of more than 20 in the morning.
The Nasdaq composite index rose 9.14 to 1,199.66 and now has gained more than 100 points, or about 9.3 percent, in less than three weeks. The Russell 2000 list of small companies rose 2.00 to 350.28, bringing its gains to more than 6 percent since early April.
Trading was busier than in recent days, but still well below the hectic, earnings-driven pace of the past few weeks.
Advancing issues outnumbered decliners by almost 5 to 4 on the New York Stock Exchange, where volume totaled 403.30 million shares as of 4 p.m.
Some of the stocks that moved substantially or traded heavily Wednesday:
PepsiCo, up 1/2 at 64.
The company raised its dividend by 15 percent and announced a stock split as shareholders voted against a smoking ban at Pizza Hut and KFC restaurants and shedding interests in countries that violate human rights.
Zenith Electronics, up 2-5/8 at 12-1/4.
The stock rose for a second day after the company said it will introduce a system that allows cable TV operators to offer high-speed data transmission, including access to the Internet.
Crompton & Knowles, down 1/8 at 15.
The maker of textile dyes and food and pharmaceutical ingredients announced a deal to acquire Uniroyal Chemical for about $1.4 billion in stock. Crompton & Knowles also said it will cut its dividend to help pay off the combined companies’ debt.
Discreet Logic, down 7-1/4 at 9-3/8.
The special-effects software company said it would report a loss for its fiscal third quarter on lower than expected revenues.
Cheyenne Software, down 4-1/4 at 19-3/4.
McAfee Associates dropped its $1 billion offer to buy Cheyenne Software, which had spurned the bid and refused to negotiate.
© Copyright 1996 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.