Dow Closes Near 8,000 Level

U.S. stocks soared Monday, encouraged by gains in overseas markets, fading worries that President Clinton's woes will undermine U.S. leadership, and optimism over potential interest rate cuts.

The Dow Jones industrial average rallied 149.85 points, or 1.9 percent, to 7,945.35. It was up as much as 243.56 points. The key gauge has picked up 545.05 points, or 7.4 percent, since bottoming at 7,400.30 on Sept. 1.

Monday's impressive showing extended Friday afternoon's rally. The market, which closed lower Wednesday and Thursday on fears that Kenneth Starr's report on the president might contain grounds for impeachment, reversed course and surged on the report's release.

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"We're not going to impeach President Clinton," said Frank Cappiello, president of McCullough Andrews & Cappiello and chairman of the Cappiello Funds. "The crimes would have to be very high and heinous. And I don't think we have that. I think what we'll get is censure."

On the other side of the globe, the inability of Japan's government to right its troubled banking system has been a big concern of investors in recent months. On Monday, Japan's ruling party offered a compromise proposal to the opposition parties in hopes of ending the stalemate on how to rescue the Long-Term Credit Bank of Japan.

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On the news, Tokyo's Nikkei 225 index advanced 2.2 percent to 14,227.37. Elsewhere in Asia, Malaysia's KLSE Composite was up 6.7 prcent and Hong Kong's Hang Seng index improved 1.1 percent.

European bourses rang up chunky gains, with London's FTSE 100 index up 2.9 percent. , Frankfurt's DAX index rose 3.4 percent and Paris' CAC 40 index was better by 3.8 percent.

In Russia, the benchmark RTS stock index rose 2.5 percent. Russia's currency, the ruble, traded at 8.5 to the U.S. dollar, a big improvement over the level of a week ago.

"Basically, the U.S. market's through the [Clinton debacle], and I think we're pretty cool in Washington," Cappiello said. "There may be a little volatility as we go through the impeachment hearings. But I think the worst damage in the market has been done. Not that Wall Street loves Clinton, but it doesn't like uncertainty either."

"I think [U.S. Treasury Secretary Robert] Rubin is the essential ingredient here," he continued. "Rubin and [Federal Reserve Chairman Alan] Greenspan are really the two keys to our economic situation.

"The whole market over the past two weeks has been one of earnings," Cappiello added. "There's been a lot of noise and a lot of fear related to Russia and Latin America. When you get right down to it, Latin America is more important than any event recently. It's one of our largest trading partners and about 50 percent of U.S. banks' foreign loans are international credits to Latin America."

On Wall Street, the transportation sector rallied on a big move in the airline group after a positive article in Barron's. Financial issues also rose, responding to across-the-board gains in banking, brokerage, and insurance segments.

In Monday's market highlights:

• The Standard & Poor's 500 Index rose 2.0 percent.
• New York Stock Exchange winners bested losers by better than 2 to 1.
• On the Big Board floor, turnover pulled back 13 percent.
• The Nasdaq Composite advanced 1.5 percent.
• The Russell 2000 Index of small-company stocks gained 1.2 percent.
• The 30-year Treasury declined 5/32, to yield 5.234 percent.

Among the stocks making news:

• Ciena (CIEN) lost 2 3/4 to 13 3/16 and Tellabs (TLAB) sank 7 5/16 to 37 11/16 after the two telecommunications equipment providers tabled plans to merge. In August, Ciena had warned its fiscal third-quarter revenues would undercut most analysts' estimates leading to widespread talk that its deal with Tellabs would come unglued.
• Walt Disney (DIS) said it would record earnings of 88 cents or 89 cents a share for its fiscal year ending Sept. 30, down from the 86 cents it realized in 1997. Most analysts had looked for 95 cents. Disney also guided Wall Street to expect profits of 15 cents to 16 cents for the fourth quarter vs. consensus projections of 21 cents. The company blamed expenses tied to the restructuring of its consumer products and filmed entertainment divisions as the reason for its sobering outlook. The stock fell 5/8 to 24 3/16.
• Agricultural and industrial equipment manufacturer Deere (DE) declined 1 3/4 to 31 7/16. It steered analysts to expect earnings for its fiscal fourth quarter ending Oct. 31 to fall below the year-ago figure of 84 cents a share. Deere said declining demand for its equipment was at the heart of its revised outlook.
• Northwest Airlines (NWAC) added 2 1/4 to 30 1/8. Striking pilots ratified a new four-year contract Saturday, putting an end to a strike that began Aug. 28.
• AMR Corp. (AMR) took off 4 15/16 to 60 1/2. The parent of American Airlines benefited from a Barron's article suggesting that the airline industry can withstand a U.S. economic slowdown better than in prior years. Barron's cited lower debt and better marketing and management.
• Hilton Hotels (HLT) dipped 5/8 to 18 1/2. The lodging and gaming concern believes third-quarter per-share net will be in the low 30-cent range, less than Wall Street's consensus forecast of 38 cents. It pointed to the Asian crisis, and its impact on its Honolulu, San Francisco, and international operations, as the reason for its disappointing forecast. It also cited softer table-game revenues at its Atlantic City and Las Vegas casino businesses.
• Other airline shares rose. Delta Air Lines climbed 8 3/4 to 104 1/8, UAL 5 7/16 to 69 3/16, Alaska Air Group 2 3/4 to 37 7/8, and US Airways Group 3 1/8 to 54 1/16.
• America Online (AOL) rose 2 7/8 to 97 7/8. It announced an expanded marketing agreement with Sony (SNE) to feature AOL on the desktop of all Sony personal computers in the U.S. and Canada. Sony shares advanced 3/16 to 75 13/16.
• Lehman Brothers (LEH) appreciated 3 5/16 to 39 1/8. On Friday, it dropped 2 13/16 on talk the brokerage concern had racked up steep losses due to emerging-markets exposure, threatening its solvency. Lehman denied the speculation Friday.