clarinews@clarinet.com (JANICE KIRKEL, UPI Business Writer) (01/17/90)
NEW YORK (UPI) -- Stocks closed higher Tuesday in active trading, with the blue chips up sharply, boosted by a rally in technology issues and bargain hunting by institutions. The Dow Jones industrial average, which fell 19.84 Monday, rose 23.25 to 2692.62, after being down as much as 28 points in early trading. Broader market indicators kept pace with the Dow industrials. The New York Stock Exchange composite index rose 1.66 to 188.37. Standard & Poor's 500-stock index rose 3.75 to 340.75. The price of an average share gained 32 cents. Advances nosed out declines 800-710 among the 1,971 issues crossing the NYSE tape. Losers had led by as much as 5 to 1 in early trading. Big Board volume totaled 186,070,000 shares compared with the 140,590,000 shares traded Monday, the Martin Luther King, Jr., holiday, when banks and government offices were closed. Analysts said bargain hunting by institutions after the market's plunge last week as well as a rally in the technology sector pushed the market into the plus column. Bolstering computer stocks were surprisingly strong earnings reports from Intel Corp. Tuesday and NCR Corp. Monday, they said. ``Institutions took the opportunity to buy on weakness,'' said Peter Vandenberg, vice president of equity trading at Shearson Lehman Hutton Inc. ``And there's been buying in the technology sector. IBM's earnings are supposed to come out soon and they're supposed to be okay,'' he said. Just before midday, a round of computerized program buying, used to profit on price differences between stocks and stock index futures, boosted prices from sharply lower levels, analysts said. The Dow industrials had been down as much as 28 points, having fallen from the opening on a plunge in the Tokyo market overnight and weakness in the bond market. On the trading floor, Philip Morris was the most active NYSE issue, up 1 1/4 to 39 3/8. Citicorp followed, down 1/2 to 26 after reporting a loss for the fourth quarter, but one which included a $1 billion addition to reserves for loans to developing countries. Aristech Chemical was third, surging 5 1/2 to 24 5/8 after reports that a management buyout at $26 a share has been proposed. Among the other blue chips, AT&T rose 1/2 to 43 1/8. The company was quoted as saying it still does no know what caused the computer glitch that left many customers around the country unable to make long-distance calls Monday. IBM surged 2 to 100 1/8, leading the technology sector up, and Chevron rose 1 1/4 to 65 7/8. Merck extended its slide, however, down 1/8 to 73 1/8 but rebounded from a sharp loss in earlier trading. Reports said the company has discontinued work on Prodiax, a drug for complications from diabetes. USX was up 1 to 35 1/2. Elsewhere in the technology sector, NCR jumped 2 3/4 to 63 3/4, Compaq surged 2 3/8 to 83 7/8, Digital soared 4 1/4 to 89 1/8 and Cray Research gained 1 3/4 to 38 7/8. Other major banks which released earnings statements posted gains. Security Pacific was up 1 to 38 5/8 after reporting a rise in fourth-quarter earnings. And Wells Fargo jumped 2 to 72 3/8, also after reporting a fourth-quarter earnings gain. The Big Three automakers were sharply higher after reporting sales gains for early January. Ford rose 1 3/4 to 45, General Motors gained 1 1/4 to 42 1/2 and Chrysler closed up 5/8 to 18 3/4. Elsewhere, Sea Containers soared 4 to 63 1/2 after plunging Monday. The company said it would urge acceptance of a bid from Temple Holdings that includes some asset sales. Many players had hoped for a bidding war involving the company and thus a greater return on their investment. Great Northern Nekoosa surged 2 1/4 to 58 1/2. Georgia-Pacific, which has bid $63 a share for the company, has begun to solicit proxies in support of its proposals to be considered at a special shareholders' meeting Mar. 2, which include a proposal to remove Nekoosa's board and elect nominees of Georgia-Pacific as directors, reports said. Georgia-Pacific closed up 1 3/8 to 48 3/4. And Georgia Gulf rose 1 1/2 to 44. The company unveiled a $55-a-share recapitalization plan late Monday. Volume of NYSE-listed issues, including trades in stocks on regional exchanges and in the over-the-counter market, totaled 217,797,910 shares, up from 168,125,080 shares traded in the previous session. Prices closed lower in active trading on the American Stock Exchange. The Amex Market Value index closed off 0.17 to 368.41. The price of an average share lost 1 cent. Declines led advances 337-240 among the 821 issues traded. Composite volume totaled 17,873,000 shares, compared with 15,396,480 shares traded Friday. Kingdom of Denmark ``put'' warrants on the Nikkei index, which effectively function as bets that the Tokyo stock market will fall, led the Amex issues, off 1/2 to 5 3/8. The National Association of Securities Dealers composite index rose 3.52 to close at 440.16.