Dow Jumps 2.6%, Posts Biggest Gain Since ‘91

The Dow Jones industrial average surged Tuesday to its biggest percentage gain in 5-1/2 years, shrinking its recent 700-point loss to just 250 points.

Broader stock indicators also rallied, but failed to keep pace with the Dow’s 173-point gain, leaving many analysts skeptical that the market’s near-term troubles are over.

There were more declining issues than advancers in the struggling Nasdaq Stock Market, and the Russell 2000 list of smaller companies posted a small loss for the day.

“The quality of the rally says we’ve got some more work to do. The market is not ready to go up, up and away. ” said Alfred E. Goldman, a securities analyst at A.G. Edwards & Sons of St. Louis and a noted optimist about the market’s long-term prospects.

The Dow rose 173.38, or 2.6 percent, to 6,833.59, bringing the famed blue-chip barometer’s rebound to 442 points, or nearly 7 percent, in just seven sessions. It was the biggest percentage gain since December 1991 and the biggest point gain since a 187-point rally that came two days after the Black Monday crash of 1987.

Advancing issues outnumbered decliners by a 3-to-2 margin on the New York Stock Exchange, where volume totaled 488.61 million shares as of 4 p.m., up sharply from Monday’s 393.65 million.

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

NYSE

Minnesota Mining & Manufacturing, up 4-3/8 at 87-1/2.

3M reported a first-quarter profit of $410 million, or 99 cents a share, slightly better than analysts had expected.

Bristol-Myers Squibb, up 3-5/8 at 63-1/2.

The pharmaceutical and consumer products company’s first-quarter earnings rose 12 percent, beating analysts expectations by a small margin.

RJR Nabisco Holdings, down 1/2 at 31-7/8.

The food and tobacco company posted 8 percent growth in its first-quarter earnings, but the results were at the low end of analysts’ expectations.

NASDAQ

Medaphis, down 13/16 at 5.

The provider of management and information-technology services for health care companies was sued by the former owners of Medical Management Sciences, which Medaphis acquired last year. The lawsuit accuses Medaphis of fraud and breach of contract, and seeks to rescind the merger agreement.

AMEX

Viacom class B, down 3-3/4 at 27-1/4.

Viacom, down 3 at 27-3/8.

The media conglomerate warned that its Blockbuster unit’s first-quarter results were weak. Viacom also announced the resignation of Bill Fields, a former Wal-Mart executive hired to help turn around the struggling video rental business.