The big rally came just a day ahead of the widely-anticipated release of the February employment report.
The Dow Jones Industrial Average sprinted ahead 191.52 points, or 2.1 percent, to 9,467.40. The Nasdaq Composite advanced 27.69 points, or 1.2 percent, to 2,292.89 after jumping as much as 2.0 percent earlier.
IBM (IBM) and Dell Computer (DELL) outlined plans for a seven-year strategic alliance valued at about $16 billion. For inclusion in its PCs, Dell will acquire technology related to data storage, microelectronics, networking equipment, and monitors. The deal also gives Dell future access to IBM's advanced semiconductor technology. The companies will cross-license patents and work on future products together.
The deal didn't impress investors - Dell shares gained just 15/16 to 81 7/8. IBM stock did better, advancing 3 15/16, or 2 percent, to 170 11/16.
Shares of some of Dell's competitors fell. Compaq Computer (CPQ) shed 5/8 to 33 1/4 and Gateway (GTW) depreciated 1 13/16 to 67 5/16.
For all of the talk surrounding the IBM-Dell pact, the technology sector gave back much of its morning run-up in the afternoon session.
"Long term, I like the technology stocks," said Brian Finnerty, managing director and head of institutional trading at C.E. Unterberg, Towbin. "I'm scared to death short term. But so is everybody else. It's a very nervous market."
Retailers rang up modest wins after releasing glowing February same-store sales results. Same-store sales refer to sales at outlets open at least a year, and provide analysts with a truer gauge of a retailer's performance. Of the Big Five retail concerns, Wal-Mart Stores (WMT) gained 2 to 89 3/8 after reporting a 10.3 percent rise in same-store sales.
Among other retailers, KMart (KM) dipped 3/8 to 17 1/8 (+5.8 percent same-store sales), Dayton Hudson (DH) rose 2 1/2 to 65 7/8 (+8.3 percent), Sears (S) moved up 3 1/8 to 43 3/4, (+0.8 percent), and JC Penney (JCP) improved 2 to 38 5/16 (-0.4 percent).
Energy stocks gushed higher for the second day, as crude oil changed hands at levels not seen in seven weeks. Reports of a drawdown in inventories aided the stocks Wednesday.
"We have an OPEC meeting on March 22, and so every oil-producing country is gaming their efforts at the meeting with press releases to try and benefit their arguments [for higher prices]," said Jim Wicklund, managing director of energy research at Dain Rauscher Wessels.
Among oil & gas field service and equipment stocks, Schlumberger (SLB) advanced 4 5/8 to 56 3/8, Halliburton (HAL) 1 37/64 to 32, and Baker Hughes (BHI) 3/4 to 20 3/8.
In the oil & gas drilling group, Transocean Offshore (RIG) improved 1 1/4 to 22 7/16 and Diamond Offshore (DO) was 1 5/8 richer at 23 5/8.
Meanwhile, Internet-elated issues traded mixed as volume dried up in many of the shares. The group has been the standout in the technology sector over the past two weeks.
In Thursday's market indicators:
- New York Stock Exchange advancing issues were ahead of losers by a 16-to-13 ratio.
- The Standard & Poor's 500 Index rose 1.5 percent.
- On the Big Board floor, turnover swelled 3 percent to 774 million shares, a shade less than its recent average.
- Winners bettered losers by 19 to 18 in the Nasdaq Stock Market. Volume totaled 882 million shares.
- The Russell 2000 Index of small-company stocks gained 0.5 percent.
- In the bond market, Treasurys idled as wariness ahead of Friday's jobs release kept investors sidelined. The 30-year Treasury rose 2/32, to yield 5.699 percent.
Among the companies in the news:
- Intel (INTC) eased 1 5/16 to 113 3/8. Gruntal lifted its rating to "strong buy" from "buy."
- Gruntal also tacked a "strong buy" rating on Micron Technology (MU) shares, lifting them 3/8 to 53. The broker had previously rated the stock a "buy."
- American Express (AXP) was up 5 3/16 to 113 after Salomon Smith Barney started coverage with a "buy" opinion.
- American Eagle Outfitters (AEOS) advanced 1 3/4 to 74 3/4. Fourth-quarter earnings totaled $1.03 a share, easily topping the 96 cents expected by most analysts according to First Call Corp. Sales at outlets open a year or more jumped 33 percent in February. BT Alex. Brown, noting that "1999 is off to a very strong start," has a "buy" rating on the shares. The broker believes the apparel retailer's stock price will escalate to $84 in the next year.
- RF Micro Devices (RFMD) picked up 4 3/4 to 85 15/16. The developer of integrated circuits for wireless communications applications mapped plans for a two-for-one stock split.
- Adobe Systems (ADBE) stepped up 5 7/16 to 45 5/8 after Merrill Lynch upped its view to "intermediate-term accumulate" from "intermediate-term neutral." The broker likes the software developer's revenue growth, improving margins, strategic direction, and earnings expectations.
- Paychex (PAYX) rolled ahead 4 5/16 to 42 7/8. Salomon Smith Barney analyst L. Keith Mullins raised his rating to "buy" from "outperform," citing the accounting services provider's growth trends, superior profitability, and return on equity. Mullins maintained his 12-month price objective of $53.
- PageNet (PAGE) connected for a 19/32-point rise, or 15 percent, to 4 168/256. The wireless paging interest entered into a content sharing and co-branding deal with Yahoo! (YHOO).
- International Game Technology (IGT) slipped 3 5/8 to 14 11/16 after the gaming machine manufacturer warned of less-than-forecast 1999 earnings. Wall Street had projected $1.54 a share.
- Merrill Lynch (MER) moved up 6 9/16 to 84 1/4. Salomon Smith Barney, oting a smart pick-up in underwriting volume and retail sales activity, raised its first-quarter and 1999 profits projections for Merrill. In addition, Salomon sees an improvement in Merrill's bond trading operation.