Market Surge Lifts Dow, Nasdaq to Record Highs

Cash poured into Wall Street’s favorite stocks once again Monday, lifting the Dow back over 10,000 and other major indexes to record highs as well.

The blue-chip Dow rocketed 174.82 points, or 1.8%, to a record 10,007.33--exactly one week after the index closed above 10,000 for the first time.

The Nasdaq composite index, dominated by major technology stocks and Internet shares, zoomed 66.69 points, or 2.7%, to a record 2,560.06, topping its old high of 2,510.09 set Feb. 1.

Also setting a record: The Standard & Poor’s 500, which leaped 2.1% to 1,321.12. Its previous high was 1,316.55 on March 18.

“It doesn’t get much better than this,” said Michael Manns, a growth-stock manager for American Express Asset Management in Minneapolis.

Well, not for investors in those favored stocks, anyway. In the broad market, however, winners outnumbered losers by a modest 17 to 13 on the New York Stock Exchange. On Nasdaq, losers had a 21-19 edge. NYSE volume was subdued.

Traders said investors came back from the long holiday weekend in a buying mood, after Friday’s government report on March employment trends showed that the economy added jobs in March but fewer than expected. Also, wages rose less than expected.

For stocks, the report suggested that the economy is continuing to advance, but not at a pace that might provoke the Federal Reserve to raise interest rates.

Indeed, bond yields were mostly flat Monday, giving stocks room to run.

Neither did the Kosovo conflict seem to weigh on Wall Street.

Internet shares were the market leaders, in what some traders said was a delayed reaction to Internet giant Yahoo’s announcement last week of a merger deal with Broadcast.com.

Yahoo soared $39.38 to $219.13 as individual investors snapped up shares of the No. 1 Internet directory. Yahoo reports earnings Wednesday, and some investors also may be betting that it will beat the 8 cents a share expected by Wall Street analysts.

The average trade in Yahoo today was 357 shares, indicating that small investors are driving the stock up. Institutional investors typically buy in blocks of thousands of shares.

Among the Dow stocks, the focus was on industrial names that potentially have the most to gain from a continuing economic expansion. Leaders included Caterpillar, up $2.13 to $49.06; GM, up $2.13 to $87.56; and GE, up $3 to a record $114.63.

“The U.S. economy remains robust, and the corporate earnings outlook is improving,” Merrill Lynch & Co. chief economist Bruce Steinberg said in a report. He raised his forecast for growth in earnings and the economy for this year and 2000.

First-quarter earnings reports will be the market’s main focus in coming weeks.

Among Monday’s highlights:

* Major tech stocks were in hot demand again, led by IBM, up $6.94 to $183.94; Hewlett-Packard, up $3.56 to $71.44; Microsoft, up $2.25 to $94.94; and Intel, up $6.63 to $127.50.

Dell Computer, the most active U.S. stock, gained $2.88 to $44.06 as investors anticipate good news from the No. 3 personal computer maker when it briefs analysts Thursday.

“We expect the company to be upbeat about the industry and its own prospects in particular,” analyst Michael Kwatinetz at Credit Suisse First Boston said.

* CBS rose $1.75 to $41.88 after the San Jose Mercury News reported that the network has held talks during the last year about a potential combination with America Online. The talks included a possible purchase of CBS by AOL, the newspaper reported, citing an unnamed person familiar with the discussions. AOL jumped $16.94 to $166.94.

* Net stocks in general were off to the races again. EBay jumped $10.13 to $148.75, Amazon.com gained $15.50 to $186.50, Inktomi rose $6.25 to $90.50, Mindspring surged $22.81 to $111.25 and CMGI shot up $28.69 to $216.

Also, online brokerage stocks zoomed after Bill Burnham, an analyst with Credit Suisse First Boston, said online trades rose 30% to 35% during the first quarter. The Internet brokers continued to gain share of all stock trades, he said.

The biggest online broker, Charles Schwab, rocketed $9.13 to a record $103.38. Ameritrade Holding, the No. 6 online broker, soared $29.06 to a record $91.63, and E-Trade, the third-largest firm, vaulted $11.75 to $72.63.

* Energy stocks gained as crude oil rose to its highest closing price in more than a year after Iraq said an attack by U.S. and British warplanes on an oil-pumping station forced a reduction in shipments. Crude futures for May rose 31 cents to $16.95 a barrel.

* Among consumer shares, Nike jumped $2.19 to $58.38 after an analyst at Donaldson, Lufkin & Jenrette Securities named the No. 1 athletic shoemaker a top pick of the firm.

But CKE Restaurants fell $1.88 to $17.88 after the owner of quick-service restaurants was downgraded by an analyst at BancBoston Robertson Stephens.

* Rental Service surged $5 to $22.25 after United Rentals made an unsolicited $1.4-billion takeover offer for it. The largest U.S. equipment-rental company wants to buy Rental Service for $22.75 a share, or about $553 million.

Market Roundup, C10