Higher bond prices help lift Dow 9 points

WALL STREET

September 25, 1992|By Bloomberg Business News

NEW YORK -- Higher bond prices lifted U.S. stocks out of a three-day slump, but gloom about earnings and President Bush's unpopularity stunted the rally.

L The Dow Jones industrial average closed up 9.18 at 3,287.87.

Standard & Poor's 500 index rose 1.04, to 418.48, and the NASDAQ Combined Composite index gained 2.97, to 585.93.

"The market feels very hesitant because corporate earnings are coming out soon," said Kenneth Ducey, director of trading at BT Brokerage.

General Mills recently released lower-than-expected third-quarter earnings, while Coca-Cola, Black & Decker and General Motors, among others, have alerted investors to possible disappointments.

"The foreign markets were the key this morning, and interest rates seem to have stabilized," Mr. Ducey said.

Treasury bonds, also breaking a losing spell, jumped on a rise in state unemployment claims, pushing the yield on the benchmark 30-year bond down to 7.42 percent from 7.48 percent late Wednesday.

The Labor Department said the number of Americans filing first-time claims for state unemployment insurance rose 15,000 in the week that ended Sept. 12, twice as many as expected.

Also yesterday, the Commerce Department said the economy grew at an annual rate of 1.5 percent in the second quarter, slightly faster than earlier estimated, but corporate profits after taxes were weaker than had been thought.

On the New York Stock Exchange, advancers outpaced decliners by more than 5-to-4.

American Telephone & Telegraph, going ex-dividend yesterday, fell 5/8 , to 43 3/4 . It was the most actively traded U.S. stock.

"The market's dragging its feet here," Mr. Ducey said. "It's not predicting a Clinton win; it's not predicting a Bush win." After AT&T, the most active stocks were Merck, Unisys Corp., General Motors Corp. and Greenwich Pharmaceuticals.

Drug stocks were a standout. Merck fell 1 1/8 , to 45 5/8 , as data from the research firm IMS America showed slowing prescription growth for the company's two biggest drugs as well as fewer prescriptions than some expected for its new prostate drug, Proscar.

Glaxo Holdings PLC ADRs dipped 1/2 , to 26 7/8 . The IMS data showed new prescriptions for ulcer drugZantac rose 2 percent in August compared with that month last year, while competitors reported big gains.

American International Group leapt 7 1/8 , to 101 5/8 , General Re surged 8 1/8 , to 102 1/2 , and Chubb soared 4 1/2 , to 79 1/4 .

Lotus Development slipped 3/4 , to 19. A Goldman Sachs analyst cut his earnings estimates for 1992 and 1993 on concern about lower revenue, higher costs and declining market share in spreadsheet software.

Unisys gained 1/2 , to 9 1/8 , in active trading. The company resumed dividend payments on certain preferred stock. Wednesday, Unisys's defense unit Paramax won a $69 million software contract from the Federal Aviation Administration.

Medisys slumped 1 3/4 , to 6 1/2 , on the company's forecast for a decline in third-quarter earnings.

Seagate Technology fell 5/8 , to 13 1/2 . Hambrecht & Quist removed the stock from its roster of top 20 recommendations yesterday.

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