The stock market pushed higher Thursday
as a stock-split mania by big-name companies and Ford Motor
Co.'s $6.45 billion acquisition of Sweden's AB Volvo car unit
proved to be a potent brew for Wall Street.
The Dow Jones industrial average ended up 81.10 points, or
0.88 percent, at 9,281.33.
But in the broader market, advancing issues edged out
declines 1,552 to 1,423 on active volume of 846 million shares
on the New York Stock Exchange.
The technology-laced Nasdaq composite index jumped 70.20
points, or 2.9 percent, to 2,477.34, a new high.
"We've got all four cylinders in the engine economy,
stock splits, economy and mergers and they are all working at
the same time," said Hugh Johnson, chief investment officer at
First Albany Corp. "That's better than any car I've ever
The big news was Ford Motor's purchase of AB Volvo's car
unit, which lifted the stock of No. 2 U.S. carmaker by 2-2/16 to
Ford, taking the latest step in global auto consolidation,
said it was buying the car business of Sweden's AB Volvo.
Volvo's commercial truck, heavy equipment and airplane engine
business units are not involved in deal.
"Ford Motor's move on Volvo is very significant, it changes
the landscape of an industry, and the market responds favorably
to those things," Lou Ehrenkrantz, president of Ehrenkrantz
King Nussbaum, said.
Meanwhile, Federal Reserve Chairman Alan Greenspan may have
put the icing on the cake when he said that Internet stocks,
despite their high valuations, might have their place in the
bull market. Speaking before the Senate Budget Committee,
Greenspan also said some stocks would succeed and some would
"(Greenspan) gives Internet stocks a touch of
credibility," said First Albany's Johnson. "He is not labeling
the Internet stocks as being entirely speculative and
Intel Corp., the world's largest computer chip maker, gained
4-7/16 to 137-3/16 after announcing a two-for-one stock split.
Leading online service America Online Inc., which made a similar
announcement Wednesday, rose 12-7/16 to 174-7/16.
The stock splits follow those earlier this week by
International Business Machines Corp., Microsoft Corp.,
McDonald's Corp. and Xerox Corp. Pfizer Inc. said it would vote
on a three-for-one stock split on April 22.
"This market actually takes my breath away," said First
Albany's Johnson. "Stocks that are overvalued are going up 3
and 4 points a day. The question is what do you do when you are
in the middle of a mania and the answer is you enjoy it."
News that the growth in labor costs slowed in the 1998
fourth quarter also helped the market.
The Labor Department reported the employment cost index, a
measure of labor costs that combines wages and salaries with
fringe benefits, rose 0.7 percent in the fourth quarter after a
1 percent increase in the third quarter.
Other data showed continued U.S. economic strength. Orders
for expensive manufactured goods rose 1.9 percent in December.
Yahoo! Inc. jumped 31-7/8 to 367-3/4 on news that it was
buying the Internet services company, GeoCities Inc., another
popular Web site, for $4.6 billion in stock. GeoCities soared
42-1/4 to 117-1/4.
Yahoo's announcement sparked further gains among top
Internet media stocks and renewed speculation among other
potential acquisition targets.
Lycos rose 11-5/8 to 123-1/8, Excite was up 8-1/2 at 116,
Xoom.Com Inc. was up 21-1/2 at 61-1/16 and TheGlobe.Com Inc.
gained 21-1/2 at 61-1/16.
America Online Inc. jumped 12-7/16 to 174-7/16 after the
company's earnings beat Wall Street forecasts.
Mason-Dixon Bancshares Inc. shot up 19-1/2 to 47-1/4 after
BB&T; Corp. said it will acquire Mason-Dixon in a $256.9 million
stock transaction that will double its presence in Maryland.
BB&T; rose 14/16 to 38-1/16.
The Standard & Poor's composite index of 500 stocks rose
22.20 points to 1,265.37. The American Stock Exchange index was
up 6.74 at 713.93.
The NYSE Composite index of all listed common stocks rose
7.32 to 595.40. The average share was up 55 cents.
The Wilshire Associates Equity Index the market value of
NYSE, American and Nasdaq issues was 11,620.799 up 175.226 or