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Wall St. takes small step up
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October 28, 1998: 5:20 p.m. ET
Stocks make modest advances amid hopes for economic recovery in Brazil
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NEW YORK (CNNfn) - U.S. blue-chip stocks closed in positive territory for the first time in three days Wednesday as investors appeared willing to give Brazil a chance to prop up its economy through austerity measures.
The Dow Jones industrial average closed 5.93 points higher at 8,371.97. Market breadth on the New York Stock Exchange remained negative throughout the day, with declines leading advances 1,539 to 1,434 on trading volume of 681 million shares.
The Nasdaq Composite rose 19.72, or 1.15 percent, to 1,737.35. The S&P 500 index advanced 2.79 to 1,068.13.
The market fell in early trading as concerns about Brazil's ability to survive a severe economic downturn loomed large, even after the country's government unveiled a $23.5 billion austerity package and the International Monetary Fund was expected to announce a $30 billion credit line to South America's largest economy.
Fears about Brazil's dire economic straits helped U.S. stocks lose their footing Tuesday too, as rumors swirled in the market that Brazil was getting ready to devalue its currency. But a second reassurance from Brasilia Wednesday that no devaluation is due cheered investors and helped Wall Street recover.
Later in the session, portfolio managers, sprucing up their holdings for the end of the month, helped support the market, as did strength among major technology stocks.
Commenting on the market action, Joseph McAllinden, chief investment officer at Morgan Stanley Dean Witter, said a period of slow movement and consolidation would be better for Wall Street than a strong, but likely brief, market rally. (357K WAV) or (357K AIFF)
The bond market was mixed. The benchmark 30-year Treasury bond fell 18/32 point in price for a yield of 5.12 percent.
The dollar also lurked in a narrow trading range, finishing barely higher against the Japanese yen and the German mark.
Eyes on earnings again
In stocks, investors once again focused mostly on the stocks of companies reporting their latest earnings.
Among the early movers, shares of Intermedia Communications (ICIX) plummeted 7-1/2, or nearly 28 percent, to 17-3/4 after late Tuesday the company reported a bigger-than-expected loss. Intermedia said it lost $2.42 a share before a restructuring charge in the third quarter, much more than the $2.08 a share the market had bet on. A rating downgrade from Merrill Lynch hurt the stock further. Merrill lowered its near-term view of the company to "neutral" from "buy" and its long-term rating to "accumulate" from "buy." And BT Alex. Brown cut its rating of Intermedia to "buy" from "strong buy."
Shares of Internet sizzler eBay (EBAY) acted tamer, closing 2-1/2 lower at 80. Late Tuesday, the Web auctioneer reported better-than-anticipated third-quarter results in its first earnings report since the company went public in September.
America Online (AOL), another hot Internet company that late Tuesday said it made a bigger profit in the latest quarter than investors hat bet on and announced a 2-for-1 stock split, finished 2-1/4 higher at 124-1/4 after an analyst from Volpe Brown Whelan raised her earnings estimate for the online service provider.
Despite better-than-hoped-for earnings, shares of biotechnology giant Amgen (AMGN) fell 3/8 to 77-1/4 even after the company reported a big jump in third-quarter profit. CS First Boston raised its rating of Amgen to "buy" from "hold."
Elsewhere, major technology issues once again attracted buyers, helping lift spirits in the rest of the market. Shares of Dow component IBM (IBM) climbed 1-5/8 to 146, Dell Computer (DELL) rose 2-1/8 to 64-5/8, Intel (INTC) was up 1-29/32 to 89-7/32, Cisco Systems (CSCO) advanced 2-1/8 to 62-7/8 and Microsoft (MSFT) inched up 1/4 to 105-11/16 even as a broad antitrust trial continues against the company in Washington.
Finally, in the day's merger news, shares of regional broker Interstate/Johnson Lane (IJL) shed 6-7/16, or more than 17 percent, to 30-9/16 following news that Wachovia (WB), the nation's 18th-largest bank, is buying the company for $230 million, a price some investors considered too low.
And shares of General Scanning (GSCN) rallied 1/2, or almost 10 percent, to 5-5/8 on news the company will join forces with Canada's Lumonics in a deal to create the world's largest maker of laser-based advanced manufacturing systems.
(Click here for a look at today's CNNfn market movers) 
-- by staff writer Malina Poshtova Zang
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