U.S. Stocks Sprint Higher

Stocks surged Monday with help from a drop in bond market interest rates, a bounce in technology shares and a rise in merger activity.

The Dow Jones Industrial Average surged 212.73 points, or 2.3 percent, to 9,552.68. It was the biggest percentage gain for the barometer in five weeks. The index's record high of 9,647.96 was set during Jan. 8's session.

The Nasdaq Composite jumped 2.6 percent. Over the past three weeks, the index tumbled 12.2 percent on an intraday basis after ballooning 87 percent from the Oct. 8 market lows.

Monday's price burst occurred a day before an important address by Federal Reserve Chairman Alan Greenspan to the Senate Banking Committee.

"Greenspan's not going to raise rates Tuesday and the market knows that," said Arthur Hogan, chief market analyst at Jefferies & Co. Inc.

Despite the hefty price surge, not everyone was convinced that stocks are ready for another major advance. Volume on the New York Stock Exchange was below average for the 10th consecutive day as some investors opted for the sidelines. In part, the cautious attitude was tied to wariness ahead of Greenspan's address.

On the plus side, the breadth of the advance was the best on the New York Stock Exchange since Jan. 15. NYSE winners numbered 1,961 and losers totaled 1,031. On the Nasdaq, gainers topped decliners by a 10-to-9 margin.

Some market watchers said many stocks had simply reached depressed levels in recent sessions and the market was ripe for a rally.

"Last Thursday, the market started to get a much better feel to it," said Barry Hyman, senior market analyst at Ehrenkrantz King Nussbaum. "I think Monday's activity was a continuation of the rally of the end of last week."

Greenspan's Tuesday address is part of his semiannual Humphrey-Hawkins testimony. Wednesday, the Fed chief will appear before the House Banking Committee in the second installment of his address.

Among sectors and groups, retailers rang up gains across the board. The stocks have outperformed the market over the past two years due to high consumer confidence, abundant job growth, and rising income levels. A number of retailers release quarterly earnings this week, aiding Monday's move in share prices.

In the retail group, Wal-Mart Stores advanced 3 1/2 to 88 1/4, Gap tacked on 3 1/2 to 65 7/8, and TJX Cos. rallied 2 5/16 to 30 1/4.

Stocks of brokers with substantial exposure to online trading rose. A Wall Street Journal article said Goldman Sachs might be interested in diving into the field, citing E*Trade Group (EGRP) as a potential candidate for acquisition. E*Trade shares put on 8 7/16 to 48 9/16, while Ameritrade (AMTD) was up 18 1/4 to 104 1/4, Charles Schwab (SCH) moved up 2 7/8 to 71 15/16, and National Discount Brokers (NDB) rose 4 1/8 to 27 1/2.

Tertiary brokers also ramped higher. J.B. Oxford (JBOH) added 2 3/8 to 10 3/8, Siebert Financial (SIEB) 6 3/4 to 30 13/16, and M.H. Meyerson (MHMY) 1 1/16 to 15/16.

In the tech sector, semiconductor and Internet groups did best. Chip shares, leaders for several months, have held up the best among computer-related groups in the market's recent pullback. That's a bullish sign for the technology sector overall. Advanced Micro Devices (AMD) rose 1 11/16 to 19 5/16 after launching its K6-III chip. It also added Gateway to its stable of clients.

Elsewhere on the semiconductor front, Rambus (RMBS) put on 9 9/16 to 80 9/16. BancBoston Robertson Stephens analyst Daniel Niles improved his rating of the stock to "buy" from "long-term attractive." Niles, who set a price target of $90, said Intel (INTC) will this week confirm its plans to use Rambus' chip-to-chip interface technology.

Gateway (GTW) was up 6 7/16 points to 79 5/16 ahead of a Wednesday meeting with analysts. Piper Jaffray analyst Ashok Kumar raised his view on the PC maker's stock to "strong buy" from "buy," lifting his first-quarter earnings forecast to 90 cents a share from 59 cents. Kumar also raised his 1999 earnings estimate to $3.87 from $2.82 and upped his price objective from $95 to $100. As well, Hambrecht & Quist started coverage of Gateway with a "buy" rating.

In Monday's market indicators:

• The Standard & Poor's 500 Index rose 2.7 percent.
• On the Big Board floor, volume expanded 3 percent to 722 million shares. Nasdaq volume totaled 833 million shares.
• The 30-year Treasury rose 11/32, to yield 5.356 percent.
• The Russell 2000 Index of small-company stocks gained 1.4 percent.

• Virginia-based electric utility Dominion Resources (D) will purchase Consolidated Natural Gas (CNG) for $6.3 billion. Dominion shares fell 2 1/4 to 40, while Consolidated stock subtracted 1 1/16 to 55 3/16.
• Sempra Energy (SRE) revealed plans to acquire natural gas service provider KN Energy (KNE) for $1.7 billion in cash and stock plus assumed debt. Sempra, the holding company for Southern California Gas Co., saw its stock dip 3/4 to 21 9/16. KN shares added 1/8 to 21 5/8.
• Southwest Gas (SWX) gained 1 3/4 to 28 3/8. It's mulling a $32-a-share cash offer from fellow natural gas distributor Southern Union (SUG). If consummated, the deal would create the nation's largest gas-only distribution entity. Southwest had penned an agreement on Dec. 14 to combine with Oneok (OKE) for $28.50 a share. Southern Union stock was ahead 1 13/16 to 19 3/4.
• Sundstrand (SNS) picked up 10 1/4 to 68 1/4. Dow component United Technologies (UTX) will buy the aerospace systems and components manufacturer for $4.3 billion. Shares of United escalated 1 1/8 to 126 9/16.
• Pinkerton's (PKT) ballooned 11 11/16 to 28 9/16. Sweden's Securitas AB will buy the security services company for $384 million, or $29 a share.
• Beyond.com (BYND) stepped up 1 13/16 to 26 9/16. It will buy fellow online software retailer Buydirect.coin a stock swap worth $133.65 million, based on Beyond.com's (BYND) Friday closing share price of $24.75.
• Delta Air Lines (DAL) lofted 2 15/16 to 58. Donaldson, Lufkin & Jenrette raised its rating to "buy" from "market perform" and set a target of $70. It also boosted its earnings projections for 1999 and 2000.
• Other carriers chipped in with multipoint wins. US Airways Group ascended 2 15/16 to 48, UAL 2 1/2 to 62, and AMR 2 11/16 to 56 7/16.