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MARKET SAVVY

Big Tech Stocks Lead a Rebound; Dow Up 115

Wall St.: Broader market sees only modest gains. Bond yields dip, and dollar loses more ground against a resurgent yen.

July 28, 1999| From Times Staff and Wire Reports

Key stock indexes rebounded sharply Tuesday from their recent slide, but the broad market closed only narrowly higher.

Some major Internet names slumped, with America Online falling below $100 a share for the first time since mid-June.

The Dow Jones industrials jumped 115.88 points, or 1.1%, to 10,979.04, as rallies in chemical stocks and American Express paced the gains.

The Nasdaq composite, which had fallen nearly 9% from its July 16 record high through Monday, rose 2.3% to 2,679.33. But that failed to recoup all of Monday's 2.7% drop.

Winners topped losers by a modest 16 to 14 on the New York Stock Exchange and by 22 to 18 on Nasdaq.

The rebound was led by major tech stocks, in particular semiconductor issues. Intel leaped $4.69 to $67.56, and Micron Technology jumped $5.88 to $57.88.

Intel, the most active stock, gained as analyst Drew Peck at research firm SG Cowen raised his rating on the stock to "buy" from "neutral" and added 8 cents to his per-share profit forecast for 1999. He now expects Intel to earn $2.33 a share.

Many computer chip stocks have been red-hot over the last two months as global demand for chips has resurged, especially in Asia.

Meanwhile, the concern that helped drag stocks lower last week--that the Federal Reserve might raise short-term interest rates again when it meets Aug. 24--faded somewhat Tuesday.

The Fed said Chairman Alan Greenspan's speech today to the Senate Banking Committee will be the same as the one he gave to the House last week. Greenspan used that occasion to warn that the Fed stands ready to tighten credit should inflation revive.

The 30-year Treasury bond yield eased to 6.01% from Monday's three-week high of 6.03%.

A report showing that consumer confidence fell this month also may have put downward pressure on interest rates.

If rates can stabilize, some analysts say, investors should be generally pleased in mulling over second-quarter earnings reports as the reporting season winds down.

Overall, operating earnings for the 342 companies in the Standard & Poor's 500 index that have reported results so far are up a strong 15.3% from a year ago, according to First Call Corp.

In other trading, the dollar continued to drift lower against the yen as signs of stronger economic growth in Asia attracted investors. The dollar ended at 116.36 yen, down from 116.61 on Monday.

The euro, meanwhile, traded at $1.062, little changed.

Asian markets were mixed. South Korea, Singapore and Hong Kong rebounded, but Taiwan's shares slumped again.

Among Tuesday's highlights:

* Major tech stocks up strongly included Apple, up $2.75 to $53.69; IBM, up $3.25 to $126.25; Dell, up $2.13 to $42.13; and Texas Instruments, up $7.88 to $143.13.

But leading Net stocks fell again. AOL lost $1.94 to $98.19; Yahoo gave up $3 to $131.31; and EBay, which reported earnings Monday, fell $4.81 to $99.56.

* Chemical stocks advanced after Union Carbide, a Dow stock, projected strong sales this quarter. It gained $2.75 to $48.75. Other industrial winners included Alcoa, up $2 to $60.63; Ingersoll-Rand, up $1.50 to $63.06; and Emerson Electric, up $1.13 to $62.50.

* American Express surged $5.88 to $142.38. Analysts said growth prospects for the credit card provider are robust, especially as the company develops an online bank and a Web-based service for corporate and travel-related products.

* Media and entertainment stocks gained. Tribune leaped $3.13 to $88.25, Time Warner rose $1.19 to $73.69, Univision surged $2 to $70 and Walt Disney added 75 cents to $28.25.

Market Roundup, C11

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