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Spokane, Washington  Est. May 19, 1883

Blue-Chip Rebound Fuels Stock Market Rally

Associated Press

Blue-chip stocks sprang back to life Wednesday as bonds ended a brief slump, boosting financial shares, and a truce between Apple and Microsoft added more fuel to the red-hot technology group.

The Dow Jones industrial average rose 71.77 to 8,259.31, barely beating last Wednesday’s record close of 8,254.89.

Broader stock indicators also set new records, with the technology-heavy Nasdaq market cruising to its sixth straight closing high.

There was little in the way of big economic news to justify the day’s strength, but the bond market halted a three-session pullback, offering some assurance that interest rates might stabilize near last week’s 17-month lows.

“The slowness in the market in the last few days was more a function of rising interest rates than it was by any piece of news,” said William M. Lefevre, senior market analyst at Ehrenkrantz King Nussbaum.

Advancing issues outnumbered decliners by a nearly 2-to-1 margin on the New York Stock Exchange, where volume was heavy again at 565.22 million shares as of 4 p.m., up from 525.67 million in the previous session.

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

NYSE

ITT, up 1-13/16 at 64-3/4.

Hilton Hotels revived its hostile bid to buy ITT, raising its offer for the owner of Sheraton hotels and Caesars World casinos by 27 percent to $70 a share, or $8.3 billion, plus $3.2 billion in assumed debt. ITT last month announced a plan to split into three companies to ruin Hilton’s bid.

Designer Holdings, down 1-7/16 at 5-15/16.

Merrill Lynch, the lead underwriter of Designer Holdings’ initial public offering in early 1996, lowered its rating on the stock, the Dow Jones News Service reported, citing a contact at the investment firm. On Tuesday, Designer Holdings warned that its 1997 results will fall shy of forecasts.

Newbridge Networks, down 4-1/16 at 46-1/2.

The Canada-based computer networking company expects to report disappointing results for its first quarter that ended Aug. 3.

NASDAQ

Apple Computer, up 6-13/16 at 26-9/16.

Microsoft, up 1/8 at 143-7/16.

The fierce computer industry rivals unveiled a stunning alliance that includes a $150 million Microsoft investment in Apple. The companies put aside a long-running patent infringement dispute, and Microsoft agreed to release versions of some popular software in Macintosh formats.

Cisco Systems, down 2 at 79-15/16.

The computer networking concern reported strong results for its fourth quarter ended July 26, meeting most analyst forecasts, but the stock had risen sharply in recent days in hopes of a blockbuster showing.