Chip Stocks Power Dow Again

Sat., Nov. 23, 1996

Associated Press

Chip stocks led a broad rally Friday as the Dow Jones industrial average set its 11th high in 13 sessions, pulling within striking distance of 6,500 just six weeks after its first close above 6,000.

The Dow rose 53.29 to 6,471.76, a gain of 123.73 points, or nearly 2 percent, for the week. For the year, the famed blue-chip barometer has advanced 26.5 percent.

Leading stock indexes also closed at new highs again as November’s powerful rally resumed after a oneday pause. The technology-rich Nasdaq market rose more than 1 percent.

“The high-techs were the lead sled dogs, and there isn’t a group that the market likes to see act well more than high techs,” said Alfred E. Goldman, vice president at A.G. Edwards & Sons Inc. in St. Louis.

IBM continued its week-long leadership in the Dow, surging $4.37-1/2 to $158.50 to set another nine-year high. Starting with last Friday, IBM has gained $21.62-1/2, or the equivalent of nearly 65 Dow points.

Semiconductor shares led the technology sector, benefiting from investment firm upgrades.

“Even though the earnings were on target and the company said things were going to stay rocky in the coming quarters, people are drawing the conclusion that we’ve seen the bottom for the technology sector,” said Goldman.

“With a market that keeps making all-time highs, investors are looking for a group that may be undervalued. If technology is going to do well, then there are values there,” he said, noting that many nonbellwether technology shares have yet to fully recover from the summer’s selloff.

Among chipmakers, Intel jumped $3.50 to $122.37-1/2 in active Nasdaq trading. On the NYSE, Micron Technology rose $1.75 to $32.50.

Many analysts were encouraged that the rally, which has been largely focused on only the biggest names in each sector, expanded to secondary companies.

Advancing issues outnumbered decliners by an 11-to-7 margin on the New York Stock Exchange, where volume was heavy at 525.21 million shares as of 4 p.m., up from 464.43 million in the previous session.

The Standard & Poor’s 500-stock index rose 5.98 to 748.73, and the NYSE’s composite index rose 2.41 to 394.66. It was the third record high this week for both measures.

The Nasdaq composite index jumped 16.28 to 1,274.36, breaking the record set Nov. 14, when it finished at 1,270.36. The American Stock Exchange’s market value index gained 3.01 to 590.77.

The Dow’s other big gainers were Caterpillar, up $2.37-1/2 to $79.87-1/2; Exxon, up $2 at $92.87-1/2; and Texaco, up $1.50 at $100.37-1/2.

The most active NYSE issue was Venezuelan phone company Compania Anonima Nacional Telefonos de Venezuela, which late Thursday sold 20.52 million American depositary receipts at $23 each in an initial public offering. The stock opened Friday at $26 and closed at $35.87-1/2.

Tokyo’s Nikkei stock average rose 0.3 percent, Frankfurt’s DAX index fell 0.3 percent, and London’s FTSE 100 rose 1.6 percent.

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