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Techs, Drugs Surge; Broad Market Mixed

April 21, 1998|From Times Staff and Wire Reports

Technology and drug stocks rocketed Monday, but the broad market had a mixed session as bond yields rose.

The tech-heavy Nasdaq composite surged 20.54 points, or 1.1%, to a record 1,887.14. But the Dow Jones industrial average lost 25.66 points from Friday's record high, to 9,141.84, hurt by profit-taking in recently high-flying financial issues.

The Standard & Poor's 500 index edged into record territory just before the close, reversing an earlier loss.

Pfizer led drug stocks higher, jumping $8.19, or 7.8%, to a record $113.38 on reports of robust sales of its new anti-impotence drug, Viagra.

However, losers topped winners by 16 to 14 on the New York Stock Exchange, as rising bond yields hurt investor enthusiasm.

The bond market had a rough day, as some investors sold bonds ahead of major bond offerings expected this week.

Companies such as Ford Motor Credit and General Motors are lined up to sell a total of about $11 billion in debt securities in coming days.

The 30-year Treasury bond yield rose to 5.93% from 5.87% on Friday. A greater supply of bonds in the market could force yields slightly higher as sellers try to entice buyers, analyst said.

Tech stock investors, however, ignored the bond market Monday, bidding many issues higher.

Optimism about Microsoft's upcoming earnings report helped lift the stock $2.50 to a record $94.63, despite an embarrassing snafu for the company. (Story, D3)

After the market closed, IBM reported first-quarter earnings that were slightly ahead of expectations. IBM rose $3.44 to $111.19 in third-market trading after the report was issued.

Some analysts have contended that earnings expectations for the first quarter have been so low--because of worries about spillover from Asia's economic woes--that companies won't find the estimates terribly hard to beat.

That could help lift the already streaking market even higher, the bulls say.

The Dow is now up 15.6% year-to-date. The Nasdaq composite is up 20.2%.

Among Monday's highlights:

* Tech stocks surging included Intel, up $1.31 to $76.50; Dell, up $2.19 to $69.69; Adobe Systems, up $1.31 to $50; Remedy, up $3.69 to $25.06; FileNet, up $2.63 to $59.13; and Texas Instruments, up $2.75 to $61.25.

* Internet-related stocks rocketed again, after pulling back on Friday. Yahoo, an Internet directory firm, leaped $4.25 to $125.75, while InfoSeek, another directory firm, gained $2.50 to $39.19.

And K-Tel International, which recently announced plans to sell its recorded music over the Net, soared $12.94 to $41.63. The stock was below $7 two weeks ago. Analysts said the stock may be rising in part because of a "short squeeze," as traders who had sold borrowed shares, betting on a price decline, are forced to rush in and buy shares to close out their positions.

* Another Internet-related issue, Broadcom, fell $2.13 to $51.50 after zooming Friday in its initial public share offering.

* In the drug sector, Warner Lambert gained $5.25 to $180.63, Merck rose $1.88 to $122.25 and Eli Lilly jumped $3.81 to $72.19. Lilly was boosted by its better-than-expected earnings report and evidence that its Evista drug may prevent breast cancer.

* The Dow was weighed down by American Express, which fell $3.25 to $103.75, and J.P. Morgan, down $2.63 to $142.13, as takeover rumors faded.

But Wells Fargo jumped $6.88 to $382 on continued speculation that it will be acquired soon.

* Among Southland issues, Cohr sank $1.75 to $8.13 after an unfavorable article in Barron's magazine.


Market Roundup, D16

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