Energy shares led a late rebound Wednesday, boosting all major stock measures to record highs, as crude oil prices rose sharply after sinking to a nine-year low in recent days.
The Dow Jones industrial average erased a 43-point drop and rose 25.41, to 8775.40, its third-straight record close.
Broad-market indicators also mounted an afternoon recovery for the second straight day, with the technology-heavy Nasdaq composite index setting a record high despite more worrisome news from the high-technology sector.
The Standard & Poor’s 500-stock index and the New York Stock Exchange composite index closed at record highs for the sixth time in seven sessions, while the American Stock Exchange composite index set a record high for the first time in more than five months.
Stocks opened the session lower amid news that another leading technology company expects to post disappointing profits for the first three months of 1998.
Late Tuesday’s announcement by Bay Networks, a networking technology concern, came a day after chipmaker Micron Technology reported a wider-than-expected loss for its latest quarter and less than two weeks after a spate of profit warnings by Intel, Motorola and Compaq Computer.
Energy-related shares–weighed down in recent days from a four-month plunge in oil prices– posted big gains as crude jumped in futures trading amid hopes that the Organization of Petroleum Exporting Countries might cut back on production.
Exxon rose $1.69, to $64.62, and Chevron rose $1.56, to $83.62, as two of the Dow’s strongest components, while oil-drilling companies were prominent gainers on the most-active list.
Consumer-product issues helped boost the Dow: Coca-Cola rose $2.37, to $74.81, and Procter & Gamble added $1.19, to $84.69.
J.P. Morgan, which led the Dow on Monday and Tuesday with a combined gain of more than $10–or the equivalent of about 40 Dow points–slid $2.25, to $133, as the Dow’s weakest issue.
Speculation that Chase Manhattan is seeking to bid on brokerage firm Merrill Lynch for as much as $100 a share ignited buying on other investment banks and brokerages in that sector. Chase ended up $3.37, at $138.12, and Merrill bulled ahead $7.25, to $87.
As for other brokers, Lehman Brothers climbed $2.62 to $72.94, Donaldson, Lufkin & Jenrette rose $2.69 to $86.75 and San Francisco-based Hambrecht & Quist finished up $2.12 at $34.37.
The Dow has now risen 11 percent in 1998, more than what most analysts had predicted for the entire year.
Advancing issues outnumbered decliners by about an 8 to 7 on the NYSE, where volume totaled 632.69 million shares–heavy, but down from Tuesday’s hefty tally of 680.96 million.
The S&P 500 rose 5.07, to 1085.52, extending this year’s gain to nearly 12 percent, and the NYSE composite rose 2.53, to 565.62.
The Nasdaq composite index rose 8.98, to 1788.28, giving that measure a 1998 gain of nearly 14 percent.
The Russell 2000 index of smaller companies rose 1.07, to 472.18, its fifth record close in six sessions. The American Stock Exchange composite rose 4.60, to 722.76, finally topping Oct. 7’s record of 721.90.
Among shares of Chicago-area companies, Dean Foods fell $3.69, or 6.7 percent, to $51.25, on heavy volume. The Franklin Park-based company warned Wall Street that it won’t meet fiscal fourth-quarter estimates because of the impact from El Nino.
The company reported fiscal third-quarter earnings in line with analysts’ expectations but said that fourth-quarter earnings will not meet First Call Corp.’s estimates of 85 cents a share.
Meanwhile, it was announced that GATX, a Chicago-based leasing and transportation company, will replace Illinois Central in the Dow Jones transportation average, effective Monday.
The Chicago-based railroad company, which has been one of the 20 members of the transportation average since September 1995, is being acquired by Canadian National Railway.
