Technology stocks broke out of their slump today after Microsoft's better-than-expected earnings report raised hopes that demand for computers will remain strong.
The Dow industrial average rose 187.43 points, to close at 10,392.36. The Nasdaq composite index, which lists the stocks of many of the world's leading technology companies, was up 99.95, at 2788.13. Broader indicators also rose, with the Standard & Poor's 500-stock index gaining 28.11, to 1289.43.
The Nasdaq benefited most from Microsoft's announcement late Tuesday that its profit jumped 30 percent in its fiscal first quarter on strong demand for personal computers equipped with its Windows operating system. Microsoft also reported strong sales of its Office 2000 and other business software.
Microsoft soared 5-15/16, to 92 1/4, lifting many technology stocks that were battered over the past week as investors worried about disappointing profit reports from Intel and Dell.
The rage for technology stocks extended to the Dow, where IBM rose sharply throughout the trading day on expectations that it would post solid earnings growth. However, after the close of trading in New York, IBM said its earnings matched expectations but that sales of certain products slowed as a result of year 2000 concerns.
IBM shares gave up nearly all their ground as trading continued on other exchanges. IBM finished down 1/8 at 107 on the New York Stock Exchange, and in after-hours trading on Instinet, sank to 102.
Chase Manhattan rose 4-11/16, to 75-13/16, after reporting that its earnings increased by 42 percent in the third quarter.
Airline stocks were mostly lower after Trans World Airlines and US Airways Group reported losses for the quarter. Both airlines struggled with labor disagreements, and rising fuel prices cut into profits. TWA fell 1/4 to 3-7/16, and US Airways fell 1-13/16, to 26-5/16.
The stock market's rise was underpinned by news that the U.S. trade deficit narrowed slightly to $24.1 billion in August as improving economies in Asia boosted demand for U.S. manufactured goods and farm exports.