Nasdaq, Russell Ride Technology Wave Again

The Nasdaq market and the Russell 2,000 closed at record highs for the 10th straight session Wednesday as renewed fervor for technology and more speculative issues regained momentum.

The broad market rose after a new report indicated a slower pace of economic growth, allaying fears about inflation. But the gains were modest again, and trading remained restrained ahead of a pivotal report on April employment.

The Dow Jones industrial average rose 6.14 points to 5,575.22--the fourth straight move of less than 10 points for the sluggish barometer of big U.S. companies.

The Nasdaq composite index rose 9.14 points to 1,199.66 and now has gained more than 100 points, or about 9.3%, in less than three weeks. The Russell 2,000 list of small companies rose 2.00 points to 350.28, bringing its gains to more than 6% since early April.

The Nasdaq and the Russell had managed only meager gains in the previous three sessions as investors took profits and waited for a government report on employment due Friday--a key indicator of economic strength. The two indexes have benefited from a series of strong earnings reports and enthusiasm that a stronger economy should benefit technology and small companies most.

Trading was busier than in recent days but still well below the hectic, earnings-driven pace of the last few weeks.

In the broader market, advancing issues outnumbered decliners by almost 5 to 4 on the New York Stock Exchange, where volume totaled 403.30 million shares as of 4 p.m.

Some of the day’s gains in price and volume were the result of predictable inflows of new mutual fund money on the first day of a new month, said Jerry Hegarty, equity market analyst for Thomson Research in Boston. Wednesday’s gains marked the seventh consecutive time in which the market has closed higher on the first trading day of a month, he said.

Bonds started the day slightly lower, pulling down stocks, amid news that an important index of future economic activity rose 0.2% in March. But bonds rebounded after a subsequent report on U.S. manufacturing indicated a moderate pace of economic growth that carries less risk of inflation.

“We continue to thread a needle. There’s a little pickup in strength in the economy, but the factors that affect inflation are modest,” said Russ Labrasca, senior vice president of Sutro & Co. in San Francisco.

The benchmark 30-year Treasury’s yield, which reflects economic growth and inflation expectations, was unchanged at 6.90%.

Earlier, bonds climbed about $5 per $1,000 after the National Assn. of Purchasing Management’s April survey suggested inflation wasn’t poised to rise even as manufacturing recuperated. Bonds later dropped after the Treasury said it would hold more frequent auctions of 10-year notes and 30-year bonds.

At the New York Merc, oil prices fell for a second day after President Clinton’s decision Monday to sell 12 million barrels of crude oil from the nation’s strategic reserve.

June gasoline fell 2.06 cents at 67.42 cents a gallon, June heating oil lost 0.93 cent to 54.16 cents a gallon and June crude oil dropped 39 cents to $20.81 a barrel.

But wheat and corn prices snapped back after two days of losses as changing weather forecasts and fears about this year’s crops sparked fresh buying by speculators and commercial processors.

At the Chicago Board of Trade, May wheat futures jumped 34 1/2 cents to $6.76 a bushel, retracing much of the big decline earlier this week. Later months closed up the 30-cent daily limit. Corn prices also rallied sharply, after falling 10 percent this week from last Friday’s record high of $5.09 a bushel.

Among market highlights:

* PepsiCo rose 1/2 to close at 64 after the company raised its dividend 15% and announced a 2-for-1 stock split as shareholders voted against a smoking ban at Pizza Hut and KFC restaurants and shedding interests in countries that violate human rights.

* Discreet Logic plummeted 7 1/4 at 9 3/8 after reporting it expects to report a third-quarter loss on lower-than-expected revenue.

* Crompton & Knowles, the maker of textile dyes and food and drug ingredients slipped 1/8 to 15 after announcing a $1.4-billion stock deal to acquire Uniroyal Chemical, which surged 2 7/8 to 14 5/8.

* Retail stocks rose as the news on the business environment continued to brighten. Sears gained 1 to 51, Wal-Mart rose 3/8 to 24 1/4 and Kmart gained 1/4 to 10 3/8.

* Cyclical stocks, whose fortunes are closely tied to the economy, were big gainers. AlliedSignal rose 2 to 60 and Eastman Kodak gained 1 1/2 to 78.

* Among the technology bellwethers, Microsoft gained 1 3/4 to 115 1/8 and Sun Microsystems rose 1 3/8 to 55 5/8.