July 3, 1997 in Nation/World

Rate Decision Drives Markets To Record Marks

Associated Press
 

First there was hesitation, but the blinking contest ended quickly Wednesday as investors bid the stock market to record territory after the Federal Reserve left interest rates unchanged.

The Dow Jones industrial average rose 73.05 to 7,795.38, slightly more than a point shy of June 20’s record finish of 7,796.51.

Broader stocks measures broke past their previous highs, with the Standard & Poor’s 500 list closing above the 900-mark for the first time.

Technology shares broke out of their recent slump, propelling the Nasdaq market to a record, but smaller-company issues failed to keep pace with the blue-chip sector.

“The market got what it wanted to hear,” said William M. Lefevre, senior market analyst at Ehrenkrantz King Nussbaum. “If we were going to be some significant change today, it would have been the Fed increasing rates, which would have caused some significant damage.”

Although the broad market was mostly higher from the start of Wednesday’s trading, the gains were slim and the Dow was trading slightly lower until Fed officials concluded a two-day strategy meeting with no change in the central bank’s key lending rates.

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

NYSE

CompUSA, up 2-11/16 at 23-15/16.

The Dallas-based computer retailer’s sales from store open at least a year rose 9.7 percent in its fourth quarter ended June 28. Total sales for the quarter rose 23 percent compared with the same period last year.

Nike class B, down 5/8 at 57-3/8.

The athletic wear maker’s fourth-quarter earnings rose 16 percent, but were slightly below analyst expectations, which had already been revised downward after a warning from Nike. Nike, based in Beaverton, Ore., reported the results for the three months ended May 31 late Tuesday.

NASDAQ

Ascend Communications, up 5-5/16 at 49-1/16.

3Com, up 3-11/16 at 48-1/8.

The computer-networking stocks benefited from brokerage upgrades. Merrill Lynch raised its rating on Ascend, and Solomon Brothers raised its rating on 3Com, the Dow Jones News Service reported.

Larscom, down 3-1/8 at 8.

The provider of network access equipment expects to post disappointing second-quarter results. Larscom, based in Santa Clara, Calif., said two key opportunities failed to materialize during the period.

Friedman’s, down 6-11/16 at 16-1/16.

The jewelry retailer said late Tuesday expects to report disappointing results for its third quarter ended June 30. Friedman’s, based in Savannah, Ga., blamed weak sales during the period.

© Copyright 1997 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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