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Nasdaq, S&P hit highs
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July 15, 1999: 5:02 p.m. ET
Stocks helped by flat CPI, strong earnings, but profit taking weighs in
By Staffs Writers Malina Poshtova Zang and Robert Scott Martin
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NEW YORK (CNNfn) - Data showing that consumer inflation remains limited and a growing list of strong second-quarter corporate profits powered gains on Wall Street and led to new records for the Nasdaq and the S&P 500 index.
Scattered profit taking, however, put a cap on the market's attempted rally.
The Dow Jones industrial average rose 38.31 points to 11,186.41. On the New York Stock Exchange gainers outpaced losers 1,833 to 1,059 as 8-4 million shares changed hands.
The Nasdaq composite index gained 21.24 points to 2,839.37 and the S&P 500 index advanced 11.45 to 1,409.62, both climbing to new all-time highs.
Gains in the stock market were limited by uncertain trading in bonds, which initially rallied on news that the consumer price index was unchanged in June, then backpedaled in sympathy with a slide in the European bond market. The bellwether 30-year Treasury bond finished 1/32 of a point lower in price, its yield at 5.91 percent.
The dollar started the day lower against the yen and the euro but managed to scramble back and finish with modest gains against both currencies.
Rate-sensitive stocks on a roll
In the stock market, financial-services shares, which are the quickest to react to any indication of interest-rate changes, took advantage of the mild CPI number and the bond market's sudden burst to head higher.
Among the Dow's financial components, shares of American Express (AXP) jumped 2-3/4 to 134-1/4 and Citigroup (C) rose 11/16 to 48-1/8.
Elsewhere in the market, Chase Manhattan (CMB) ended up 3/8 at 82-1/8 and BankAmerica (BAC) rose 3/4 to 74-11/16.
Gains on the Dow were supported by Coca-Cola (KO), whose shares climbed 2-1/8 to 64 after the company's second-quarter earnings met analysts' expectations. Although Coke's profit dropped 21 percent compared with a year earlier, analysts had lowered their forecasts to reflect the company's troubles in Europe.
Boeing (BA), on the other hand, slipped 7/8 to 46-3/4 even though the Dow aerospace manufacturer posted surprisingly strong second-quarter earnings. The company earned 75 cents per diluted share in the period, 8 cents more than the market had expected, as revenue surged 13 percent.
A fresh profit warning from US Airways (U) drove shares of the airline down 3-7/16 to 40-7/8 and cast a pall over the rest of the transportation sector, knocking the Dow transports down 24.48 points to 3,397.03.
In a filing with the Securities and Exchange Commission, US Airways said earnings in the second half of 1999 will fall below analysts' forecasts. The carrier earlier had warned Wall Street that second-quarter profits will miss the mark, blaming unflattering revenue trends, along with rising fuel and labor prices, for the anticipated shortfall.
Techs calm down
In the high-profile technology sector, investors appeared ready to slow their recent record-breaking buying spree and cash in on some gains, despite a continuous stream of solid profit reports from some premier members.
Shares of Apple Computer (AAPL) eased 2-11/16 to 53-1/4 after climbing for days in advance of the company's latest earnings report. Late Wednesday, Apple stunned even the most optimistic on Wall Street by solidly beating market predictions for its third-quarter profit. Apple earned 69 cents a share on an operating basis, 5 cents more than Wall Street had bet on.
However, CIBC World Markets cut the stock to "underperform" from "hold" Thursday, citing a cloudy growth outlook for the current quarter, and lowered its price target to the $40-$45 range.
Other computer makers were caught between the profit-taking urge and continuing excitement over upcoming earnings. Among the gainers, Dell (DELL) edged up 7/16 to 43-15/16 and Gateway (GTW) lost 1-1/4 to 72.
The Dow's computing components also gave a mixed performance. IBM (IBM) shed 15/16 to 136-5/16 but Hewlett Packard (HWP) rallied 4-9/16 to 113.
Chip stocks traded unevenly in the wake of the week's mixed bag of earnings reports from semiconductor companies. Sector heavyweight Intel (INTC) lost 5/16 to 67-11/16 and chief competitor AMD (AMD) shares slipped 5/16 to 17-11/16 after overnight posting a widely-anticipated operating loss.
Elsewhere in the chip sector, National Semiconductor (NSM) shares climbed 1 to 28-5/16. The company unveiled its new all-on-one-chip integrated processor design Thursday.
(Click here for a look at today's list of CNNfn market movers.)
(Click here for a look at today's CNNfn technology stocks report.) 
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