Dow Leaps 114.74, Recovers More Lost Ground
Technology stocks led a broad rally today, erasing almost every trace of Friday’s sell-off, as the Federal Reserve helped restore some faith in the outlook for low inflation and interest rates.
The Dow Jones industrial average rose 114.74 to 7,918.10, giving it a two-day gain of 223 points and nearly repairing all of the remaining damage from Friday’s 247-point slide, which was the second-largest point drop in history.
By contrast with Monday’s late advance, which aided the blue-chip sector more than the broad market, Tuesday’s rally led some analysts to conclude that the market’s sharp retreat from record levels may have run its course in less than two weeks.
“We had a selling climax on Friday, which is hard to identify except in hindsight,” said Alfred E. Goldman, market analyst at A.G. Edwards & Sons of St. Louis.
Tuesday’s rally actually stalled briefly after Federal Reserve officials concluded one of their periodic strategy meetings with no increase in the central bank’s key lending rates. But buying soon extended the day’s gains.
Stocks also drew a psychological boost Tuesday from the settlement of the UPS strike, which was beginning to provoke fears of a potential drag on the economy and company profits.
Advancing issues outnumbered decliners by more than a 2-to-1 margin on the NYSE, where volume was heavy again at 545.58 million shares as of 4 p.m., up from 514.27 million on Monday.
Some of the stocks that moved substantially or traded heavily Tuesday:
NYSE
Bay Networks, up 3-1/8 at 37-1/8.
The computer networking concern said strong bookings would propel revenue beyond analyst estimates for the current quarter.
Gateway 2000, up 2-3/4 at 40.
UPS, the computer maker’s main delivery service, and the Teamsters announced an agreement to end a crippling 15-day strike.
Tiffany & Co., up 2-1/2 at 43-1/4.
The upscale retailer reported a second-quarter profit of $10.38 million, beating analyst estimates.
NASDAQ
Dell Computer, up 2-5/16 at 84-11/16.
Investors bet on a strong profit showing from Dell, which reported better-than-expected results for its second quarter after Tuesday’s close.
Ramtron International, up 1-5/32 at 8-3/16.
Digital Equipment will begin using Ramtron’s enhanced dynamic random access memory technology in its Alpha microprocessor personal computers.
Ross Systems, down 1-7/32 at 3-23/32.
The Atlanta-based computer server concern warned that it expects to report a loss of between $2.5 million and $3 million for its fourth quarter ended June 30.