FINANCIAL MARKETS : Technology Stocks Give Dow a Boost

Technology stocks shook off the doldrums Tuesday and once again led the market higher following some good third-quarter corporate earnings reports.

The Dow Jones industrial average rose 11.56 points to 4,795.94.

Declining issues and advances were just about equal on the New York Stock Exchange. Volume on the floor of the Big Board came to 356.38 million shares, up from 299.50 million in the previous session.

The NYSE’s composite index rose 1.11 points to 314.10. The Standard & Poor’s 500-stock index rose 3.75 points to 586.78. At the American Stock Exchange, the market value index rose 2.00 points to 536.77.

Stocks reversed an early downward course set by mixed interpretations of some corporate earnings reports.

IBM’s results were initially a disappointment to the market as they included the company’s first loss in two years, after taking into account a special charge to help pay for Lotus Development Corp.

Indeed, for much of the day, the stock languished in negative territory. As stock analysts looked more closely, however, opinion changed amid optimism about the company’s fourth quarter. IBM rose 2 7/8 to 96 7/8

In another surprise, Eastman Kodak said third-quarter profit jumped 75% from a year ago. The stock rallied 2 5/8 to 59 3/4.

Overall, technology issues, which have taken a beating over the past month, rallied sharply following good earnings announcements from Sun Microsystems and Compaq Computer. Intel released a good earnings report after the market closed on Monday.

While Sun Microsystems jumped 6 3/8 to 65, Intel rose 2 3/8 to 65 1/2 and Compaq was up 3 to 51 3/8.

Microsoft also announced better-than-expected earnings, but after the market’s close. In anticipation, the stock rose 4 3/8 to 91 1/8 during the session.

The rally in technology issues pulled up the Nasdaq 17.31 to 1,035.44.

The past few weeks’ decline in technology stocks had come as investors, worried about third-quarter results, sold issues that had run up sharply in value. For most of the year, however, technology issues had performed better than the broader market.

Besides the earnings news, there was little to guide the session, said Alfred Goldman, director of technical market analysis at A.G. Edwards & Sons in St. Louis.

The day’s economic reports had little impact, he said. The Federal Reserve said industrial production fell 0.2% in September, the first decline in five months.

That was, however, mostly attributed to a drop in energy usage as summer ended and, at the same time, was in line with expectations.

Still, it was the latest evidence of only moderate economic growth, and there also appeared to be more good news on the inflation front.

The central bank said the nation’s factories, mines and utilities were operating with more slack in September. Industries were operating at 83.8% of capacity last month, a drop of 0.4 percentage points from August.

The economic reports helped set a positive tone as investors hoped that they might encourage the central bank to cut interest rates again soon, said James Solloway, director of research for Argus Research in New York

The yield of the 30-year Treasury bond, a barometer of long-term interest rate trends and inflation fears, dropped to 6.28% from 6.30% on Monday.

The dollar fell against most major currencies for the second day in a row Tuesday as economic turmoil in France continued to steer investors to German mark-based assets.

The French National Assembly began Tuesday to debate the 1996 French budget. Some doubted whether the government can slash spending enough to help shrink its budget deficit amid slower economic growth and declining tax revenues.

In late New York trading, the dollar fell to 1.4135 German marks from 1.4240 marks late Monday. The dollar ended at 100.45 Japanese yen, down from 100.57 yen Monday.

In commodities trading, copper prices sagged on the weak figure for industrial production last month and a tentative sign that the supply squeeze on copper was easing.

Market Roundup, D8