Dow Stands Out in Day of Rallies

Emboldened by how well U.S. and foreign markets recovered from near-collapse last week, investors aggressively bought stocks again Monday to lift the Dow Jones industrial average to its third-biggest point gain in history.

Investors bid up shares across the board, with nearly four stocks rising for every one that fell on the New York Stock Exchange. But they especially snapped up the blue-chip Dow Jones industrials, which surged more than 3%, or 232.31 points, to 7,674.39.

Because the market is now so high, the gain came nowhere near the top 10 advances on a percentage basis, and daily swings of 100-plus points are becoming commonplace.

Still, the jump eclipsed the percentage gains posted by nearly every other stock market index Monday, and it went a long way toward erasing the Dow industrials’ 273-point loss for all of last week.

It also was the average’s third-largest daily point gain, behind its record jump of 337.17 points last Tuesday--when the market rebounded from a record 554-point drubbing--and a 257.36-point gain on Sept. 2.

Stocks of computer makers, retailers, banks and the airlines also rose sharply as investors found their prices--knocked lower by the turbulence of last week--too compelling to ignore.

“Fear has shifted to greed,” said Robert Stovall, president of Stovall/Twenty-First Advisers Inc. in New York. “Some investors wish they’d bought more aggressively last week.”

Traders arriving at work also were welcomed with optimistic news: The Hong Kong stock market, whose rapid erosion sparked last week’s wrenching drop in U.S. trading, had just posted a big rally Monday, with the Hang Seng index there soaring 631 points, or nearly 6%.

Stock markets in Singapore, Malaysia and in Indonesia (which just received a multibillion-dollar economic rescue package from the International Monetary Fund and others) also showed gains for the day.

The recent financial turmoil worldwide “is over, mostly because the Asian situation seems to be stabilizing,” said Edward Yardeni, chief economist at the investment firm Deutsche Morgan Grenfell in New York.

Upbeat reports on two of the Dow Jones industrials--General Electric Co. and Sears, Roebuck & Co.--also encouraged investors. GE rose $2.50 a share to close at $67.13, after saying analysts’ estimates of its 1997 profit are on course. Sears climbed $3.44 to close at $45.31 after the investment firm Bear, Stearns & Co. recommended its clients buy the stock.

But some analysts cautioned that the market’s resurgence from a week ago doesn’t necessarily mean stocks are poised to set new records, and they urged investors to expect more turbulence in the weeks ahead.

The market is “continuing to level out” from its steep decline early last week, “but I don’t look at this day as the start of a new up-trend that takes us back to new highs,” said Richard Cripps, vice president for research at the investment firm Legg Mason Inc.

The Dow Jones industrials have been lagging the broader market for several months; they remain about 585 points below their record high of 8,259.31 reached Aug. 6. But the average is still up 19% for the year so far.

Broader market measures set new highs just a month ago and--despite the ugliness of last week’s plunge--are still sporting handsome gains for 1997. The Standard & Poor’s 500 index (which rose 24.37 points Monday to close at 938.99) is up nearly 27% this year, and the Nasdaq composite index (up 36.37 points to close at 1,629.98) has gained 26%.

Volume on the New York Stock Exchange totaled 573.2 million shares, down from Friday and back within its normal range of recent months.

Among Monday’s highlights:

* ITT rose $1.94 to $76.63 after Hilton Hotels surprised the market and sweetened its bid to buy ITT for $80 a share. Hilton, up $1 to $31.81, was thought to have given up on ITT recently after being outbid by Starwood Lodging Trust, which fell $2.38 to $57.44 a share.

* Fluor plummeted $3.88 to $37.25 after the Irvine-based engineering concern said its fiscal 1998 earnings will trail Wall Street expectations.

* Airline gainers included American parent AMR, up $3.19 to $119.63; Delta, up $5.06 to $105.81; and Southwest Airlines, up $1.25 to $33.88.

* In the computer sector, Intel rose $1.63 to $78.63, Microsoft was up $4.13 at $134.13, and Dell Computer jumped $3.13 to $83.25.

In London, the benchmark FTSE-100 index rose 64.10 points, or 1.3%, to 4,906.40, and Frankfurt’s DAX-30 index gained 94.07 points, or 2.5%, to 3,847.73.

The Tokyo Stock Exchange and other financial markets in Japan were closed for a national holiday.

In foreign exchange trading in New York, the dollar rose sharply against the Japanese yen but fell against the German mark amid signals that German authorities will leave their interest rates unchanged for now.

Gold, meanwhile, closed at $313.60 an ounce, up $2.30, on the New York Mercantile Exchange.

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One-Week Turnaround

Although well below their highs for the year, most U.S. and foreign stock indexes have recovered much of the ground lost last week.

U.S. INDEXES

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Monday Week-ago 52-week close close high Dow industrials 7,674.39 7,161.15 8,259.31 Nasdaq 1,629.98 1,535.09 1,745.85 S&P; 500 938.99 876.98 983.12 Wilshire 5,000 9,073.72 8,537.05 9,486.69 Russell 2,000 440.98 420.13 465.21

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FOREIGN INDEXES

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Monday Week-ago 52-week close close high Hong Kong (Hang Seng) 11,255.11 10,498.20 16,673.30 Japan (Nikkei-225) 16,458.94* 17,038.36 20,681.10 Germany (DAX-30) 3,854.07 3,879.12 4,438.93 Mexico (Bolsa) 4,849.68 4,263.89 5,369.48 Brazil (Bovespa) 9,858.04 9,816.81 13,617.30

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*Friday’s close; market was closed Monday.

Source: Bloomberg News

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Dow up 232

The Dow Jones industrial average, apparently putting last week’s wild ride behind it, soared 232 points in its third biggest point gain ever. The buying spree put the Dow within 41 points of recouping last week’s loss.

Monday’ close: 7,674.40

Last Monday: 7,161.15 A1

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* INVESTOR SPOTLIGHT

Hong Kong stocks lead recovery. D18

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Times wire services were used in compiling this report.