May 13, 1997
IBM's Stock Surges by 2.5 Percent
EW YORK -- One day after its chess computer defeated Garry Kasparov, the world chess champion, IBM stock surged to a 10-year high and was only a few dollars shy of its record.
IBM stock rose 2.5 percent Monday, or $4.25 a share, closing at $171.75 on the New York Stock Exchange. The stock previously closed at $168 in January before falling as low as $129.25 last month. Its record closing price was $174.75 set in August 1987.
Wall Street analysts were reluctant to credit euphoria over the victory of Deep Blue, IBM's 1.4-ton cyber-grandmaster, for the rise. Instead, they cited a weakening dollar, which makes IBM's products more competitive overseas, and continued bullishness by investors in the aftermath of an optimistic outlook delivered last week by the chairman and chief executive, Louis Gerstner Jr.
"This is an $80 billion company," said Bill Milton, an analyst at Brown Brothers Harriman. "I can't believe that machine chess is going to contribute that much to overall revenue and earnings."
Other analysts said that the publicity that accompanied Deep Blue's victory helped reinforce the belief that IBM is on a roll.
Copyright 1997 The New York Times Company