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Bulls back with vengeance
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November 3, 1997: 5:43 p.m. ET
Dow, Nasdaq post third-largest point gains in brisk trading
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NEW YORK (CNNfn) - Investors came back to Wall Street Monday with renewed confidence in world stock markets, and the result was the third-largest point gain ever for the Dow Jones industrial average.
Feeding on rallies in Asia and Europe, the blue chip index surged 232.31 points, or 3.12 percent, to close at 7,674.39. Monday's gain was surpassed only by last Monday's 337.17 point increase and the 257.36 point rally on September 2.
On the New York Stock Exchange advances trounced declines, 2,345 to 652, as almost 570 million shares changed hands .
In broader stock markets, the Nasdaq Composite rose 36.37, or 2.28 percent, closing at 1,629.98. It was the third-largest point gain in history for the technology-laden index too. The broader S&P 500 index closed up 24.37, or 2.66 percent, at 938.99.
Monday's momentum was fueled in part by strong rallies overseas, starting in Hong Kong where the Hang Seng index rose 631.33 points, or 5.94 percent, to close at 11,255.11. European markets soon followed, with London's FTSE 100 index up 64.1, or 1.32 percent, at 4,906.4 and Frankfurt's DAX-30 index up 127.38, or 3.42 percent, at 3,854.07.
"The events that are driving the market are not the events that we're used to. It's not going to be driven by any earnings report, certainly not going to be driven by economic releases," said Robert Froehlich, chief investment strategist at Zurich Kemper Investments. "It's really going to be driven by the events going on around the globe, both what's happening in Asia, what's happening in Latin America and so that's going to portend to a lot of volatility in the stock market in the fourth quarter."
As investors shifted back to stocks, bonds lost ground. The benchmark 30-year Treasury bond fell 24/32 to yield 6.20 percent, weighed further by a report that personal income rose more than expected in September, and the release of the National Association of Purchasing Managers index for October, which came in above expectations.
Among Monday's active stocks, Hilton Hotels (HLT), rose 1 to 31-13/16 after the company sweetened its hostile takeover bid for ITT (ITT). After repeatedly rebuffing Hilton's offers, ITT recently found a "white knight" in Starwood Lodging (HOT), agreeing to be acquired in a deal worth $9.8 billion. Shares of ITT rose 1-15/16 to 76-5/8 while Starwood Lodging fell 2-3/8 to 57-7/16.
Technology stocks, which had been among the most volatile sectors last week, were also active Monday, with Intel (INTC) rising 1-5/8 at 78-5/8, Dell (DELL) up 3-1/8 to 83-1/4 and Microsoft (MSFT) surging 4-1/8 to 134-1/8 on the Nasdaq. On the NYSE, Compaq (CPQ) was up 3-1/8 at 67-1/8 while IBM (IBM) gained 3-3/16 at 101-11/16.
Also in the news, Lockheed Martin (LMT) announced Monday that it will sell some businesses to General Electric (GE) for $2.8 billion in Lockheed preferred shares now held by GE. GE is expected to record a gain of more than $1 billion from the deal while Lockheed will gain more than $300 million. GE shares rose 2-1/2 to 67-1/8, while Lockheed shares were 4-1/16 higher at 99-1/8.
In other deals, Integrated Health Services (IHS) will pay $1.15 billion in cash and will assume $100 million in debt in the purchase of the Horizon long-term health-care assets of Healthsouth Corp. (HRC). Integrated Health shares closed 1-7/16 higher at 33-3/16 and Healthsouth were up 2-1/4 at 27-13/16.
Shares of Boeing (BA) fell 5/16 to 47-11/16 after news that US Airways chose European rival Airbus Industrie to order 400 planes. Boeing also said Monday that it will phase out two jets models in its Douglas Products division. Boeing said its fourth-quarter results will include a charge related to the phase-out.
Oil company shares were fueled Monday by rising oil prices as a dispute between Iraq and the United Nations over weapons inspections worsened. Chevron ( CHV) was up 3-13/16 at 86-3/4, Exxon (XON) rose 13/16 to 62-1/4, and Texaco (TX) gained 1-3/16 to 57-3/4.
Among the day's big losers, shares of Warner-Lambert (WLA) fell 4-1/4 to 139-1/8 after the U.S. Food and Drug Administration said the company's Rezulin, a new diabetes drug, may cause liver damage in some patients. Merrill Lynch downgraded the stock from "buy" to "near-term accumulate."
-- by staff writer Malina Poshtova Zang
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