Stocks Stage Broad Rally; Asia Trading Surges Back

Market Overview * Stocks jumped to new highs as another strong buying wave swept Wall Street. A rebound in Asian markets helped buoy sentiment.

* Bond yields inched up, responding to more signs of economic strength. Some commodity prices leaped as a new cold wave bore down on the Midwest and East.

Stocks

The 1994 rally picked up a new head of steam, helped by computer-guided program trading.

The Dow industrials, off 23 points over the previous three sessions, jumped 24.77 points to 3,867.20, topping the prior peak of 3,865.51 reached Monday. For the week, the Dow added 46.43 points.

More important, demand for stocks was broad and deep Friday: Winners topped losers 12 to 9 on the New York Stock Exchange and 15 to 11 on the Nasdaq market.

The Nasdaq composite index of mostly smaller stocks surged 4.50 points to a record 792.31. On Thursday, the index had reached a new high for the first time since last Oct. 15.

Analysts said Wall Street was cheered Friday by more indications of a strengthening economy, and by some better-than-expected quarterly earnings reports.

The encouraging economic backdrop is a virtual siren call for stock mutual funds and pension funds to buy stocks, experts say. And because many funds are flush with new cash since the year began, there is plenty of ammunition for a rally.

“Investors are interpreting the environment as the best of all possible worlds,� with low interest rates, low inflation and solid corporate profits, said Anthony Dwyer, strategist at Sherwood Securities.

Among the market highlights:

* Motorola, up 3 1/4 on Thursday after it reported quarterly earnings that topped estimates, added 1 to 99. Other tech stocks rallying included Hewlett-Packard, up 2 to 87 1/2; Autodesk, up 2 1/4 to 44 3/4; Texas Instruments, up 3 to 72 1/2; Creative Technologies, up 2 to 36 1/2; and Xircom, up 3/4 to 19 3/4.

* Industrials leading the Dow up included DuPont, up 1 1/4 to 52 3/8; GE, up 1 1/2 to 106 3/4; Goodyear, up 2 1/4 to 47 1/4; and GM, up 1 to 61 1/4.

* Disney also helped the Dow: It shot up 1 5/8 to 47 5/8 on new optimism about Euro-Disney’s future.

* Many telecommunications issues continued to rebound. Ericsson leaped 3 3/8 to 45 1/2, 3Com surged 1 3/8 to 51, DSC Communications jumped 1 3/8 to 68 7/8 and Newbridge Networks added 7/8 to 67 1/4.

* Among Southland issues, Optical Radiation gained 1/2 to 17 1/2. Benson Eyecare of Rye, N.Y., said it has taken a 6.2% stake in Optical. Benson tried to talk merger with Optical in 1993 but was rebuffed.

Meanwhile, Kaufman & Broad Home fell 7/8 to 23 5/8 after reporting lower-than-expected earnings.

In foreign markets, Mexico City’s Bolsa index fell 48.90 points to 2,486.68 as profit-takers hit again.

But Asian markets posted strong gains after recent heavy losses. Hong Kong’s Hang Seng index jumped 597.74 points to 10,774.25, while Singapore’s Straits Times index shot up 108 points to 2,302.86. In Kuala Lumpur, Malaysia, the composite index surged 104.97 points, or 10%, to 1,134.14.

Among other markets, Tokyo’s Nikkei index rose 396.44 points to 18,973.70, London’s FTSE-100 soared 40.6 points to 3,400.6 and Frankfurt’s DAX eased 22.84 points to 2,141.82.

Other Markets

Bond yields rose moderately as some investors backed away, spooked by the latest signs of economic strength.

The yield on the Treasury’s 30-year bond rose to 6.29% from 6.25% on Thursday.

The Federal Reserve said industrial production jumped 0.7% in December, nearly double expectations. Also, a University of Michigan survey showed consumer optimism surged in January.

In other markets:

* Crude oil, heating oil, natural gas, hog and cattle futures rose, as a new Arctic blast headed for the Midwest and East--boosting fuel demand and stranding livestock.

* Near-term gold futures closed at $389.50 an ounce on the New York Comex, off 50 cents. Silver added 3 cents to $5.21.

Market Roundup, D4