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Markets & Stocks
Dow keeps hitting records
March 17, 1998: 5:30 p.m. ET

Blue chips bounce back in last hour of trading, setting new all-time high
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NEW YORK (CNNfn) - In a sign of inexhaustible bullishness, blue chips Tuesday spent most of the session in the red, then bounced back in the last hour of trading to close with a new record high.
     Weakness in oil and technology stocks was offset by a surge in banking shares and news of several large-scale mergers.
     Low inflation, tumbling oil prices, and upbeat attitude from market analysts also helped feed the bulls. Among leading Wall Street gurus to change their minds about the market: Goldman Sachs' Abby Joseph Cohen, who raised her year-end projection for the Dow to 9,300, up from 8,700, a "conservative" estimate she made on Feb. 2.
     "The principal conclusion is that we expect profit growth to continue through our new forecast horizon," Cohen said in a strategy report.
     The Dow Jones industrial average rose 31.14 points to close at 8,749.99, a second record in a row. On the New York Stock Exchange, declines narrowly led advances 1,516 to 1,447 on trading volume of 681 million shares.
     But some analysts were skeptical about the bull market's ability to remain intact in the face of shaky first-quarter earnings and the lingering effects of the Asian economic turmoil.
     "This kind of rate of gain is unsustainable," said Richard Dahlberg, head of U.S. equities at Salomon Brothers Asset Management. (240K WAV) or (240K AIFF)
     Weakness in the technology sector weighed on the Nasdaq Composite, which lost 8.88 to 1,779.30, but the broader S&P index gained 1.18 to 1,080.45, another second straight record. (Look here for the performance of widely held stocks.)
     The bond market finished lower as selling emerged late in the day. Earlier, the market had ignored a 6 percent surge in housing starts in February and focused on a strong dollar and falling oil prices -- a guard against rising inflation. The price of the benchmark 30-year Treasury bond fell 10/32 of a point, raising the yield to 5.87 percent.
     The dollar settled in a narrow range, giving back some gains against the German mark and the Japanese yen. A rising British pound contributed to the greenback's weakness.
    
Banks ride high with Chase

     Despite the overall negative tone in the market, banking shares surged, helped by low interest rates and news of a major restructuring at Chase Manhattan (CMB), the nation's largest bank. Chase shares surged 6-7/8 to 134-3/4 after the bank said it would cut 4,500 jobs, or 6.5 percent of its work force, and take a first-quarter charge of $320 million. The reorganization should result in annual savings of $460 million for Chase.
     Other banking shares followed higher, with Citicorp (CCI) rising 2-5/8 to 142-3/16 and Dow member J.P. Morgan (JPM) gaining 4-3/4 to 134-7/8. Both recently announced job cuts in an effort to improve their bottom lines.
    
Mergers make market's day

     Several large mergers joined low inflation and quarter-end buying by mutual funds to give the market support, a day after Wall Street's spectacular record run.
     Among newsmakers of the day, shares of H. F. Ahmanson (AHM) surged 12-3/8, or almost 19 percent, to 77-7/8 on news Washington Mutual (WAMU) is buying the company in a deal worth $9.9 billion. Ahmanson is the parent of Home Savings of America, the nation's second-largest savings institution after Washington Mutual. Their marriage will create a new West Coast powerhouse with assets of over $150 billion. Shares of Washington Mutual rose 1-3/16 to 72-15/16.
     In another deal, shares of Inland Steel Industries (IAD) jumped 4-3/4, or more than 20 percent, to 28-1/8 on news Ispat International (IST), a rival Dutch conglomerate, is buying the company's manufacturing unit for $1.43 billion in cash and debt. Ispat's American depositary receipts rose 1-1/4 to 26.
    
Tech stocks left out in the cold

     But technology shares, left behind in Monday's rally, stumbled again Tuesday, hurt by a larger-than-expected loss at computer chip maker Micron Technology (MU), whose stock lost 1-13/16 to 31-15/16. Late Monday Micron said it lost 23 cents per diluted share in its fiscal second quarter, much more than the 17 cents Wall Street gurus had predicted.
     Rival chip maker Intel (INTC), which itself issued a profit warning several weeks ago, fell 15/16 to 76-3/4.
     And shares of software giant Microsoft (MSFT) slipped 1-11/16 to 80-5/16 after the Justice Department widened its ongoing probe into the company's business practices to include applications related to Sun Microsystems' (SUNW) Java programming language.
     Other technology stocks also weakened, with Dell (DELL) losing 1-3/16 to 62-3/8, Compaq (CPQ) falling 1-7/8 to 23-5/8, and Dow component IBM (IBM) off 3/8 to 100-7/8.
    
Oil stocks get drained

     Persistent weakness in world oil prices kept shares of oil companies depressed, with Dow component Chevron (CHV) losing 13/16 to 82-1/16 and another Dow member, Exxon (XON), shedding 1-5/16 to 62-7/8.
     In the day's other news, shares of Immunex (IMNX) rose 3-7/8 to 74-3/4 after a company official expressed optimism that Immunex will be able to obtain "fast track" consideration from the Federal Drug Administration of its rheumatoid arthritis drug Enbrel. The company believes it could receive approval for the drug by year-end.Back to top
     -- by staff writer Malina Poshtova Zang

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.