The advance extended a worldwide rally set off yesterday by reports showing faster growth with little inflation.
The Standard & Poor's 500 Index was on target for its biggest two-week gain since December 1987. Intel led a rally in computer stocks, sending the Nasdaq Composite Index to an intraday record, after the company reassured investors it will fulfill all customers' orders for computer chips.
Greenspan's remarks suggest the central bank chief isn't leaning toward raising interest rates next month for a third time this year, investors said.
"There's a lot more optimism in a market fueled by a good interest-rate outlook," said Christian Stadlinger of BlackRock Advisors. "Lower interest rates are good for stocks" because they make future earnings worth more.
The Dow Jones Industrial Average rose 152.93 to 10,775.46 in midday trading on the 70th anniversary of the 1929 stock market crash. The S&P 500 gained 29.39 to 1,371.83 and has advanced 10 percent in the past two weeks. The Nasdaq climbed 95.07 to 2,970.29, and the CNET Tech Index added 83.28 to 2,280.33. More than five stocks rose for every two that fell on the New York Stock Exchange.
For the week, the Dow has gained 2.8 percent, the S&P 500 5.3 percent, and the Nasdaq 5.5 percent. For October, the Dow is up 4.2 percent, the S&P 500 6.9 percent, and the Nasdaq 8.2 percent.
Intel rose 4.88 to 77.06. The stock will become one of the 30 Dow industrials on Monday. If it were in the average today, it would have added 26 points; the new Dow would have risen 90 points at the open rather than 57.
The semiconductor maker said it will meet chip orders even though supplies of the products are "tight" owing to rising demand for personal computers.
"That's the kind of comment that's really making people have a higher degree of comfort with technology stocks," said David Currie of Edinburgh Fund Managers, who holds shares in Intel. "These are the companies that are going to have very strong revenue and earnings growth."
Intel shares fell 2.8 percent Wednesday on concern it was having trouble making enough processors to meet demand.
Sales of PCs are stronger than expected right now, Intel executives said late yesterday during a conference call with financial analysts. That's putting pressure on the company to produce enough microprocessors, the brains of the machines.
IBM rose 3.63 to 98.56, contributing most to the Dow average's surge.
America Online rose 3 to 129.5. The largest Internet service company plans to split its stock 2 for 1, its second split this year and its fourth in the past two years. AOL is one of the best-performing stocks in the Internet industry, boasting a market value of $140 billion, as its shares have soared almost tenfold in the past two years; quadrupling in 1999.
Several Internet companies rose after reporting sales increases. Infoseek gained 2.44 to 31.31. The Internet search service posted a smaller-than-expected fourth-quarter loss and said revenue doubled. Infoseek's losses widened to 34 cents a share, 8 cents less than analysts expected.
Go2Net, which runs an Internet directory and a network of Web sites, climbed 7.69 to 66.81 after Prudential Securities analyst Michael Legg raised the stock to "strong buy" from "accumulate." Go2Net said yesterday that it made 12 cents a share, twice what analysts expected.
eToys lost 5.75 to 64.88 after the Internet toy retailer said Goldman Sachs, which handled the company's initial stock offering, will allow company insiders to sell 9.5 million shares earlier than expected. The company also said second-quarter sales quintupled as it added new features before the holiday shopping season. Still, its fiscal second-quarter loss widened to 38 cents from 4 cents a year earlier.
Priceline.com dropped 4.31 to 63.19. The operator of a Web site where shoppers name their price for plane tickets and hotel rooms said revenue rose more than 16-fold. Its third-quarter loss widened because of a warrant issued to Continental Airlines.
Greenspan, speaking after the close of trading yesterday, said lasting productivity gains helped the U.S. economy expand in the third quarter at the fastest pace this year without triggering higher inflation. That indicated the central bank chief isn't keen to raise lending rates a third time this year.
The rally expected today is in contrast to this day 70 years ago when the stock market crashed. The Dow industrials tumbled 30.57, or 11.7 percent, to 230.07 that day, extending the previous day's 12.8 percent loss.
October 29 wasn't the biggest one-day decline ever for the Dow; the average fell 22.6 percent on October 19, 1987.
Copyright 1999, Bloomberg L.P. All Rights Reserved.
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