Strong Earnings Ease Gloom On Wall Street

Wall Street sobered up with a smile Wednesday. The Dow Jones industrials gained ground in calm trading after Tuesday’s somersaults and the Nasdaq composite index had its biggest point gain ever.

Stocks found their legs as investors got encouraging news on corporate earnings and at least ambiguous news about economic growth and inflation.

The Dow Jones industrial average finished up 18.12 points at 5,376.88. The volatile, technology-heavy Nasdaq composite index shot up more than 33 points, far ahead of the previous record rise - 24.07 points on Oct. 21, 1987, two days after the Oct. 19 crash.

Since disappointing earnings reports had dragged the market down earlier this week, signs of strong profits lifted it Wednesday.

“Yes, Virginia, there are positive earnings surprises,” said Larry Wachtel, a market analyst at Prudential Securities.

Big Board volume was heavy at 509.47 million shares as of 4 p.m. but well below Wednesday’s record 680.31 million.

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

NYSE

Computer Associates rose 6 to 46-1/2.

The business software maker on Wednesday reported a surprisingly strong 35 percent climb in profits in the first fiscal quarter, with help from new corporate contracts.

EDS Corp. rose 3-3/8 to 50.

Electronic Data Systems priced 20 million shares of common stock Tuesday at 46-5/8 per share. The size of the offering was decreased from the originally planned 30 million shares.

Ford Motor rose 1-3/4 to 32-1/4.

The nation’s second-biggest automaker said Wednesday that its second-quarter earnings rose a surprisingly strong 21 percent, driven by record profits from its financial services unit.

Time Warner rose 3-3/8 to 36-5/8.

Time Warner said Wednesday the Federal Trade Commission staff has agreed to approve its $7.5 billion purchase of Turner Broadcasting System to create the world’s largest media and entertainment company.

NASDAQ

Intel rose 1-5/8 to 71-5/8.

After the close of trading on Tuesday, the computer chip maker reported second-quarter net earnings of $1.04 billion, or $1.17 a share, the first time the company’s quarterly net income exceeded $1 billion.

AMEX

Cheyenne Software rose 2-3/4 to 18.

The company said its fourth-quarter net operating profits would be 21 cents to 24 cents a share, compared with analysts’ estimates of 18 cents to 20 cents.