Smaller Stocks Set More Records As Dow Limps

Blue-chip stocks limped higher Monday, again failing to keep pace with smaller-company shares, which lifted several indexes further into record territory.

The Dow Jones industrial average rose just 12.77 to 7,835.18 after advancing 58 points in the morning and drifting lower through the afternoon.

Broader stock indicators posted wider gains, bolstered by the continued interest in smaller and mid-sized companies, which have lagged the blue-chips for most of the year.

“The primary markets seem to be languishing, yet the broadest measures of the market continue to do well, playing catchup, so to speak,” said Scott Bleier, investment strategist at Prime Charter.

The Russell 2000 index of smaller companies notched its eighth consecutive record high, while the Nasdaq composite index and the American Stock Exchange composite index, both of which include a large number of smaller companies, also set new highs.

With no major economic reports due until later in the week, there were few broad themes to steer Monday’s trading.

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

NYSE

America Online, up 6-1/8 at 76-1/16.

CompuServe (Nasdaq), down 3/16 at 12-5/15.

WorldCom (Nasdaq), up 2-1/4 at 33-3/4.

CompuServe is being sold to WorldCom for stock valued at $1.2 billion, or $13 a share, in a three-way deal that hands all of CompuServe’s online subscribers to AOL. In exchange, WorldCom will get AOL’s ANS Communications division, which provides Internet access for large businesses.

General Signal, down 5-13/16 at 38-15/16.

The electrical components manufacturer, based in Stamford, Conn., warned that disappointing sales would push its earnings below Wall Street forecasts.

First Data, down 2-3/4 at 37-7/16.

Morgan Stanley lowered its rating on First Data to “outperform” from “strong buy,” the Dow Jones News Service reported.

NASDAQ

Technology Modeling Associates, up 2-1/2 at 16.

Avant! Corp. of Fremont Calif., agreed to acquire Technology Modeling, another provider of software used to make integrated circuits, for stock valued at $150 million. Technology Modeling is based in Sunnyvale, Calif.

Cymer, down 12-7/8 at 69-1/8.

The stock slid again in the aftermath of Cymer’s withdrawal last Wednesday from a semiconductor equipment conference. San Diego-based Cymer disclosed Monday that the company had been notified of a potential development that could affect the company’s near-term results.

Hollywood Entertainment, down 4-3/16 at 12-1/16.

Several investment firms downgraded the stock amid worries the video retailer’s third-quarter results will fail to match Wall Street expectations, the Dow Jones News Service reported.