NEW YORK (CNNfn) - The Dow industrials continued to blaze their way into previously undiscovered territory Monday, extending last week's record climb as strong earnings growth inspired banks and transportation stocks to usurp the leadership role previously played by the sagging technology sector.
Shortly before 11:30 a.m. the Dow Jones industrial average soared 215.96 points, more than 2 percent, to 10,709.85. Gainers trounced losers by a margin of 2,235 to 644 as 409 million shares changed hands on the New York Stock Exchange.
The picture was less bright for the technology-heavy Nasdaq Composite, which found it hard to recover after a week of turmoil. The index rose at the open, only to slide back and stand little changed, up 5.90 points at 2,489.94. The S&P 500 index rose 17.68, nearly 1.4 percent, to 1,336.68. (Click here for a look at today's list of CNNfn's market movers.)
Bonds drifted, kept in check by more corporate debt supply after last week's heavy issuance calendar, as well as the strength of the stock market. The benchmark 30-year Treasury bond traded flat, yielding 5.57 percent.
The dollar crept up against the yen and continued to force the euro to new lows following weekend comments by European finance officials implying they will tolerate their nearly four-month old currency's decline against the greenback.
Banks ride the wave
In stocks, strong earnings once again were behind the market's climb, and financial-services stocks once again took the lead.
Citigroup (C), the Dow component and largest U.S. financial-services conglomerate, became the latest bearer of bullish news, reporting record first-quarter profit and earnings per diluted share of $1.04, well above market projections for 87 cents a share. Citigroup's stock rallied 2-13/16 to 74-7/16.
Following in the footsteps of Citigroup, banking giant BankAmerica (BAC) also reported results that surpassed expectations, and saw its stock rise 2-7/8 to 75-7/8.
The news drove other banking stocks higher as well. Chase Manhattan (CMB) rallied 3-1/2 to 89-9/16. On the Dow, American Express (AXP) gained 1-1/8 to 131 and J.P. Morgan (JPM) rose 4-3/4 to 137-7/8.
Airlines fly, oil explodes
The Dow transports picked up where they left off last week, leaping 138.57 points, nearly 4 percent, to 3,667.27. Airlines, truckers and railroads were all deep in the black, with the airlines in particular extending their recent advance as investors woke up to the sector's relative bargain values.
Shares of Southwest Airlines (LUV), which reports its earnings later in the day, surged 1-3/4 to 34-1/2. US Airways (U), which reports Wednesday, climbed 1-11/16 to 56-5/8. Delta Air Lines (DAL) gained 1-15/16 to 68-1/4 and United parent UAL (UAL) jumped 3-13/16 to 86-13/16.
Trucking firm CNF Transportation (CNF) joined the party after announcing first-quarter profits of 58 cents per share, beating Wall Street estimates by 8 cents. As a result, shares leapt 3, or 7.5 percent, to 43.
The transport rally flew in the face of an upturn in oil stocks, a traditionally bad sign for the fuel-dependent truckers and airlines. Morgan Stanley Dean Witter raised its outlook on crude-oil prices, bumping its 1999 price target to $16 per barrel from $13.50 and its 2000 target to $17.50 per barrel from $15.50.
Morgan Stanley also said it expects major oil stocks to edge higher, recommending investors take up heavier positions in the sector. On the Dow, driller Chevron (CHV) surged 4-5/16 to 103-3/16 and Exxon (XON) leapt 3 to 82-15/16. Oil-field-service firm Halliburton (HAL) climbed 3-7/16 to 44-13/16.
Elsewhere in the energy industry, shares of Consolidated Natural Gas (CNG) soared 5-11/16 to 58-1/8 after the fossil exploration company got a $6.7 billion buyout offer from Columbia Energy Group (CG). Columbia shares slipped 1-9/16 to 46-11/16, while shares of Dominion Resources (D), Consolidated's former preferred merger partner, climbed 1-13/16 to 39-7/8.
Tech stocks shaky again
Technology stocks, the market's laggard last week, remained disoriented as investors digested news that a leading computer manufacturer is taking dramatic action to fight off slowing profit growth.
Over the weekend, the board of Compaq (CPQ), the world's largest PC maker, forced the resignation of President and Chief Executive Eckhard Pfeiffer. The shake-up came only days before the company's first-quarter earnings release and its annual shareholder meeting, and just nine days after Compaq warned its profits would amount to less than half of consensus market expectations.
Compaq shares slipped 1/16 to 23-9/16, while the company's rivals in the computer industry were mixed. Rival computer maker Dell (DELL) edged up 5/16 to 38-9/16, but Gateway (GTW) fell 1 to 63-3/16.
Performance was equally mixed among the Dow's technology components. Shares of Hewlett Packard (HWP) advanced 2-1/16 to 72-7/16, but IBM (IBM) was down 1/16 at 170-5/16.
Outside the big computer makers, shares of QWest Communications (QWST) rallied 4-1/16 to 86-1/16 on news BellSouth (BLS) will invest $3.5 billion to buy a 10 percent stake in the company.
-- by staff writer Malina Poshtova Zang with Robert Scott Martin