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IBM LEADS DOW TO GAIN OF 79.56

A new technology unveiled by IBM energized the blue-chip sector Monday, but the Dow Jones industrial average came up shy again in a bid to push back above 8,000.

The Dow, which bobbed above 8,000 for the first time in a month on Thursday, also made four fleeting forays above 8,000 on Monday before settling at 7,996.83, up 79.56 on the day.

The Dow, which has been down as much as 8 percent from Aug. 6's record close of 8,259.31, hasn't finished a day above 8,000 since Aug. 20.

"A lot of people are using strength in the blue chips to sell and move money elsewhere," particularly mid-sized and smaller companies, said Bob Dickey, managing director of technical analysis at Minneapolis-based Dain Bosworth. "A break above 8,000 (by the Dow) would do a lot to improve investor sentiment."

Falling interest rates in the bond market, which has been bolstered by reports showing that inflation has remained tame, fueled the stock market for the seventh consecutive session. A jump in the dollar's exchange rate against other currencies, which spurs foreign demand for U.S. investments, also helped lift the Treasury market on Monday.

With no major economic report due before next week, there are few potential potholes to upset to the widely held belief that Federal Reserve officials won't slow the economy with higher interest rates when they meet next Tuesday.

IBM surged 4 5/8 -- or the equivalent of 17 1/2 Dow points -- to 103 7/8 after introducing a new technology to make semiconductor circuitry with copper instead of aluminum, which costs more and transmits less quickly.

Semitool Inc., which has a prototype machine for making copper chips, rose 5-1 1/1 6 to 24- 5/1 6.

The Dow also drew a big boost from Merck, up 4 1/4 to 102 7/8 ; and J.P. Morgan, up 3- 5/3 2 to 114-1 7/3 2.

Amazon.com surged 6 5/8 to 54 after rising to 56 1/8 as some investors bailed out of failed bets that the company would be a flop. The so-called "short squeeze" occurs when investors who sold shares in hopes of a decline scurry to cover losses.

Electro Rent Corp. shares rose as much as 5 1/2 to an all-time high of 33 1/2 as the provider of equipment rental and leasing services agreed to acquire GE Capital Services' GE Capital Technology Management Services division for $320 million in cash.

ICN Pharmaceuticals Inc. stock rose 6- 1/1 6 to 49 7/8 amid expectations that the drugmaker's hepatitis drug could be combined with a Schering-Plough Corp. drug in a therapy for patients who have relapses.

Computer Data Systems Inc. surged 10- 5/1 6 to 46- 9/1 6 after it agreed to be bought for $373 million in stock and assumed debt by Affiliated Computer Services Inc., which fell 2 to 27 3/8 .

Advancing issues outnumbered decliners by a 13-to-9 margin on the NYSE, where volume was a modest 490.93 million shares, down sharply from Friday's pace of 631.04 million.

The Standard & Poor's 500-stock list rose 4.92 to 955.43, about 5 points shy of record territory; and the NYSE composite index rose 2.60 to 499.16, beating Aug. 6's record close of 497.00.

The Russell 2000 rose 1.81 to 448.98; the Nasdaq composite index rose 9.09 to 1,689.45 for its third straight record; and the American Stock Exchange composite index rose 3.00 to 689.94 to set its seventh straight closing high.

The price of the benchmark 30-year bond rose 1 1/3 2 point, or $3.44 per $1,000 in face value. Its yield, which moves in the opposite direction from price, fell to 6.35 percent from 6.37 percent late Friday.

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