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Asian Recovery, Earnings Help Boost Wall St.

January 14, 1998|From Times Staff and Wire Reports

Wall Street and Asian markets have begun to look like members of a mutual support group this week, as U.S. stocks' rally Monday helped send Asia higher on Tuesday, which in turn boosted U.S. stocks.

The Dow Jones industrial average rose 84.95 points, or 1.1%, to 7,732.13 on Tuesday, after gaining 66.76 points on Monday.

Tuesday's broad-based U.S. rally set the tone for another strong advance in battered Asia early today, as beaten-down regional currencies also rebounded.

Hong Kong's Hang Seng stock index was up 6% to 9,243 at midday today, after gaining 7.4% Tuesday.

"People are settling down about a number of issues," said Peter Canelo, strategist at Morgan Stanley Dean Witter in New York, adding that most of the latest readings on the U.S. economy suggest enough strength to help compensate for Asia's slowdown.

Indeed, after markets closed Tuesday, technology bellwether Intel reported quarterly earnings above expectations, despite weaker demand in some Asian markets. Intel shares had gained $1.31 to $76.94 in regular trading, as tech stocks in general surged.

Techs' gains pushed the Nasdaq composite up 34.05 points, or 2.3%, to 1,541.63 on Tuesday.

In the broad market, winners topped losers by 21 to 9 on the New York Stock Exchange and by 28 to 14 on Nasdaq. Trading remained heavy in both markets.

Some favorable corporate earnings reports released during market hours Tuesday helped provide support for stocks. Issues getting a boost from their fourth-quarter reports included Ameritech, up $2 to $84.38; Agouron Pharmaceuticals, up $2.75 to $33; and Raymond James Financial, up $2.25 to $37.25.

With faith in corporate profits improving, investors were less attracted to bonds--which saw a mild sell-off, sending the yield on the bellwether 30-year Treasury bond to 5.73% from the two-decade low of 5.69% set Monday.

Bonds also may have been hurt by a rebound in some commodity prices. Corn and wheat prices jumped after the U.S. Department of Agriculture indicated supplies might be smaller than expected in coming months.

The crop report, which showed the lowest amount of land planted with winter wheat--45.6 million acres--in 25 years, prompted strong gains in wheat prices. At the Chicago Board of Trade, March wheat rose 12.25 cents to $3.34 a bushel.

Gold also rallied, with near-term futures rising $5 to $283.30 an ounce in New York.

Asia's market rebound also may have made U.S. Treasuries less appealing. And early today the Indonesian, Malaysian and Thai currencies all continued to rise sharply from last week's record lows, on hopes that international bailout programs may yet get a chance to work.

The main Malaysian stock index was up 6.1% at midday today after rising 5.5% on Tuesday. Thailand's main index was up 3.3% at midday today after rising 2.9% Tuesday.

Among Tuesday's U.S. highlights:

* The Dow's biggest gainers were J.P. Morgan, up $3.69 to $106.88; AT&T, up $2.81 to $65.19; and Travelers, up $2.38 to $49.63.

* Tech shares advancing included IBM, up $2 to $102.13; Dell, up $2.63 to $89.69; Compaq, up $3.13 to $59.13; Texas Instruments, up $4.75 to $47.25; and Micron Technology, up $3.38 to $32.

* Bank stocks also gained, including BankAmerica, up $2.69 to $65.31; Bankers Trust, up $ 3.19 to $104.88; and Mellon Bank, up $2.31 to $59.75.

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