Surging Ibm Fuels Stock Rally

Money managers scurried to add IBM’s surging shares to their portfolios Tuesday, boosting the Dow Jones industrial average to its ninth new high in 10 sessions.

The Dow rose 50.69 to 6,397.60, nearly piercing the 6,400-mark for the first time just five weeks after its first close above 6,000.

Broader measures also moved back to record levels after a one-day pause, with technology, energy and financial stocks leading the way. But the continuing blue-chip emphasis of the market’s post-election rally raised more doubts about how much longer this leg of the bull market could last without at least a minor pullback.

“It’s been narrower and narrower in terms of the stocks participating in the market’s rise,” said Richard E. Cripps, chief market strategist for Legg Mason of Baltimore. “The Dow’s rise is still not pulling the rest of the market with it. Usually, it’s that sort of divergence that marks the end of a run in the market.”

Advancing issues outnumbered decliners by nearly a 7-to-5 margin on the New York Stock Exchange, where volume totaled 454.42 million shares as of 4 p.m., up from 388.05 million in the previous session.

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

NYSE

Hewlett-Packard, up 3 at 52-3/4.

The nation’s second-largest computer maker reported a 4 percent drop in its fourth-quarter profits as revenue growth weakened to its slowest pace in five years. But after late Tuesday’s report, HP told analysts that demand has been improving.

Kmart, up 1-5/8 at 11-1/4.

The stock surged as the NYSE’s most active issue amid rumors that the investment firm Kohlberg Kravis Roberts & Co. has an interest in buying the troubled discount retailer.

CompUSA, down 4-1/8 at 44-3/4.

Montgomery Securities lowered its rating on the computer retailer’s stock to hold from buy, the Dow Jones News Service reported.

NASDAQ

Rainforest Cafe, down 2-1/4 at 28-1/4.

The theme-restaurant chain said its president and chief operating officer took a 30-day leave of absence for personal reasons.

Shuffle Master, down 1-3/4 at 10-1/8.

The Minneapolis-based provider of casino products said it expects fourth-quarter earnings to be below expectations, citing marketing and development costs.

Intermet, up 3/4 at 13.

Sudbury, up 2-3/8 at 12-3/8.

Intermet, based in Troy, Mich., offered to buy its Cleveland-based rival maker of auto components for about $195 million, or $12.50 a share.