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MARKET SAVVY

Dow Logs Still Another High as Nasdaq Retreats

April 28, 1999| From Times Staff and Wire Reports

U.S. stocks ended mostly higher Tuesday despite profit-taking in some major tech shares. Blue chips led the rally.

The Dow industrials streaked to yet another new high, up 113.12 points, or 1.1%, to 10,831.71, as investors returned to many heavy-industry shares.

The Dow now is up nearly 18% this year.

The broader Standard & Poor's 500 index also hit a record, up 2.76 points to 1,362.80.

But the Nasdaq composite, which had jumped to a new high on Monday, fell back 49.64 points, or 1.9%, to 2,602.41 on Tuesday as key tech stocks pulled back.

The Nasdaq index still is up 18.7% so far this year.

Traders said DuPont's quarterly earnings, released early Tuesday, helped encourage investors to replay the recent move into the economically sensitive, or cyclical, stocks on the belief that the world economy is improving.

"DuPont's earnings and some positive comments from them helped the whole cyclical case here," said Joseph Battipaglia, chief investment strategist at Gruntal & Co.

"Investors believe in the bull story and they're looking for growth at a reasonable price, and for the time being, they can find it in cyclical issues."

DuPont, a Dow stock, surged $2.38 to $69.13 after the company said that while quarterly operating earnings per share dipped from a year ago, its full-year results could be "slightly stronger" than expected.

Other cyclical stock winners included Alcoa, up $2.13 to $55.38; Illinois Tool Works, up $2.06 to $74.31; Union Carbide, up $1.38 to $49.63; and Dow Chemical, up $5.19 to $118.

"They were ignored and beaten down, with so much money chasing the high techs," said Renee Carret, a money manager at Carret & Co., which oversees $1.2 billion. "Now the outlook is for a turn in their markets. I wouldn't be surprised to see them much higher at this time next year."

Technology stocks, meanwhile, were subjected to "a little light, uninformed profit-taking," said Arthur Hogan, chief market analyst at Jefferies & Co. in Boston. "There is no fundamental news in that area; it's just that the prices got to such a raucous level."

Microsoft slid $4 to $84 and Intel was off $2.19 to $62.25, while Dell lost $1.63 to $43.19.

But many other tech stocks rallied, including Texas Instruments, up $2.50 to $114.25, and Computer Sciences, up $4.25 to $60.

Overall, winners still had a slight edge over losers on Nasdaq. On the New York Stock Exchange, the winners' margin was a much greater 17 to 12 in active trading.

The S&P index of 600 smaller stocks gained 0.7% to 172.27 points--another sign that interest in the market is broadening to include more than just blue chips.

Bullish Wall Street pros say the combination of strong first-quarter corporate earnings and rising belief that the Asian economy is recovering could continue to attract money into U.S. and foreign stocks.

It helps that bond yields have remained stuck in a narrow range, showing no real fear that faster growth will drive interest rates higher. The 30-year Treasury bond yield edged down to 5.54% on Tuesday from 5.57% on Monday.

Among Tuesday's highlights:

* AT&T rose as high as $55.69 on news of its strong quarterly earnings, but fell back to close up 6 cents at $53. The company surprised Wall Street last week with its bid for MediaOne.

* Bank stocks rebounded, led by BankAmerica, up $2.50 to $74.50; Bank One, up $2.56 to $59.81; and Wells Fargo, up $1.31 to $44.

* Some major consumer stocks were weak, led by Disney, down $2.50 to $32.50 on the heels of its disappointing earnings report.

Also falling: Procter & Gamble, down $1.25 to $93.56; and Nike, down $1.50 to $62.50.

* Southland issues up strongly included Gemstar, up $5.13 to $119.63, and Univision, up $2.56 to $64.56.

Market Roundup, C14

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