Stocks Turn In Strong Gains As Worries Fade

Stocks made their best showing in a week on Monday, led by technology shares, as investors looked past last week’s earnings disappointments and the 10th anniversary of the Black Monday crash passed without incident.

The Dow Jones industrial average, which had fallen 210 points during the preceding two sessions, rose 74.41 to 7,921.44.

Broader stock measures also posted sizable gains, led by the technology-laden Nasdaq composite index, which had tumbled 4 percent last week.

“What we have is nothing more than a regrouping after a selloff,” said Rao Chalasani, chief investment strategist at Everen Securities.

The strength in the technology sector, blind-sided by last week’s earnings disappointments from the likes of Intel and Sun Microsystems, was unexpected coming before Monday’s third-quarter profit reports from IBM and Microsoft. After Monday’s close, both of those technology bellwethers posted results that were slightly above expectations.

Analysts also said investors may have been more willing to bargain hunt now that Sunday, the 10th anniversary of the Black Monday crash, had passed uneventfully. While comparisons between 1987 and 1997 are difficult, the market’s slide on Thursday and Friday was mildly reminiscent of the two-day selloff that preceded the 1987 crash.

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

NYSE

AT&T, up 2-5/16 at 47-1/2.

The telecom giant reported strong third-quarter results and resolved the mystery over who will succeed chief executive and chairman Robert E. Allen. AT&T announced that C. Michael Armstrong, the noted leader of Hughes Electronics, will take over on Nov. 1.

ITT, up 5-3/8 at 75-3/4.

After resisting Hilton Hotel’s hostile $11.1 billion buyout offer, ITT agreed to a $13.3 billion bid from Starwood Lodging.

Sears Roebuck, down 1-1/8 at 45-5/8.

Smith Barney downgraded the retailer to “neutral” from “outperform,” Dow Jones Newswires reported. On Thursday, Sears reported better-than-expected third quarter profits, but warned of troubles from consumer credit delinquencies.

NASDAQ

HSN, up 3-1/4 at 41-7/8.

Seagram (NYSE) up 2-13/16 at 35-1/4.

The parent of Home Shopping Network agreed to buy most of Universal Studios’ television operations, including the USA Network and Sci-Fi Network, for $4.1 billion in stock and cash from Seagram, which recently took sole control of USA Network in a $1.7 billion buyout of Viacom.

Intuit, up 3-7/8 at 34.

BT Alex. Brown upgraded the maker of personal finance software to “strong buy” from “buy,” Dow Jones Newswires reported.