NEW YORK, AUG. 6 -- Stock prices rose sharply yesterday because of a surging demand for technology issues and the lack of new Persian Gulf hostilities, pushing the Dow Jones industrial average and other key indexes to record highs.
The closely watched average of 30 industrial stocks jumped 27.58 points to 2594.23, surpassing the record of 2572.07 set last Friday. It was the indicator's 48th record close of the year.
"I believe a lot of people were waiting for the problem in the Persian Gulf to subside," said Hank Striefler, a senior vice president at Shearson Lehman Bros. Inc. in New York. "As soon as people saw there was no war ... a lot of money came racing back into the market."
Analysts said much of that money was poured into technology stocks, partly because of reports suggesting a protracted slump in the semiconductor industry is over.
The technology rally helped companies ranging from IBM to over-the-counter software makers and spilled into other areas as well. Many of the buyers were foreign investors.
"I feel the underlying strength to the market is still there," said Philip C. Puccio, senior vice president and manager of institutional trading at Dillon, Read & Co. in New York. "To the Japanese and Europeans, our market is still relatively cheap."
Gaining issues outnumbered losers by nearly 2 to 1 in composite New York Stock Exchange trading. Big Board volume totaled 191.95 million shares, compared with 192.72 million Wednesday.
Among the most prominent technology-related gainers, IBM rose 4 1/8 to 163 1/8, Digital Equipment rose 3 7/8 to 169 1/8, Hewlett-Packard rose 2 7/8 to 65, Cray Research rose 5 1/8 to 110 and Compaq rose 3 3/8 to 50 3/8.
Paper and drug stocks also benefited from the rally. International Paper rose 2 to 51 5/8, Weyerhauser rose 1 to 54, Merck rose 2 1/2 to 188 3/4 and Warner Lambert rose 1 3/4 to 81 1/4.
General Motors fell 7/8 to 87 7/8 after the company announced a 1.9 percent financing plan to clear its unsold models, a move that was likely to reduce the troubled auto maker's earnings.
Oil and metals stocks continued to lose, a reflection of profit-taking on the sharp runups those sectors enjoyed earlier in the week when the market was afflicted with anxiety about the Middle East. Atlantic Richfield fell 3/4 to 94 3/4, Alcoa fell 1 1/4 to 59 3/8 and Asarco fell 1 to 30 3/8.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 223 million shares.