Dow Displays Hope For Traditional Year-End Rally

Stocks rose sharply Monday amid hopes the market will enjoy its traditional January bounce despite all the nagging worries about the economic crisis in Asia.

The Dow Jones industrial average rose 113.10 to 7,792.41, pushing this year’s gain back above 20 percent with just two sessions to go.

Broader measures also posted big gains as many traders returned from a five-day Christmas break looking for stocks that might benefit from January’s predictable surge of demand from holiday bonuses, annual contributions to retirement accounts, and money freed up by year-end tax-selling.

“It’s very difficult to overcome the conviction that there’s going to be a flood of money coming into the market in about a week’s time, and it’s inevitable that people will act on that assumption,” said Richard A. Dickson, a technical analyst at Scott & Stringfellow of Richmond, Va. “Barring some unexpected event, some catastrophe in the Far East, the market should rally” in January, Dickson said.

Even with the sudden burst of optimism, however, there were few indications Monday that investors had grown carefree about Asia’s unresolved financial mess.

Although the big advancers included several bellwethers in technology and banking, the two groups deemed most vulnerable to Asia’s troubles, Monday’s gains were fairly broad-based.

“I don’t think anybody has come to the conclusion that the last shoe has dropped in Asia, so it’s going to take a brave soul to jump in with two feet in technology,” said Dickson.

Some of the stocks that moved substantially or traded heavily Monday:

NYSE

Allied Signal, up 2-7/16 at 38-1/4.

Analysts project the stock will top $50 a share by 1999, according to an article in the latest issue of Barron’s.

NASDAQ

Gadzooks, up 3 at 22-3/8.

The Dallas-based retailer of teen apparel and accessories reported that its 1997 holiday sales were slightly ahead of plan. Gadzooks said sales for November and the first 28 days of December rose about 37 percent from year-ago levels.

Moyco Technologies, up 3/4 at 5-3/4.

The Montgomeryville, Pa.-based company ended talks to sell certain assets of its chemical mechanical polishing business to Ashland, but said it is close to signing a deal to sell technologies used in the semiconductor industry.

Microware Systems, up 15/16 at 5-9/16.

Zenith Electronics agreed to extend an existing licensing agreement to include the software maker’s Digital Audio/Video Interactive Decoder package for Zenith high-definition television products. Microware is based in Des Moines, Iowa.