Dow rebounds 25.94 in light trading day

WALL STREET

September 29, 1992|By Bloomberg Business News

NEW YORK -- U.S. stocks, shaking off a slump in the health care and drug sectors, bounced back from last week's decline to close higher.

The advance was led by a flurry of computer-driven buy orders and a rally in the oil and electrical equipment sectors. The Dow Jones industrial average closed 25.94 points higher, at 3276.26, with Caterpillar Inc., Chevron Corp., General Electric Co. and Exxon Corp. accounting for most of the advance.

Advancing common stocks outnumbered declining common stocks by about 7 to 6 on the New York Stock Exchange.

Standard & Poor's 500 index rose 2.27, to 416.62, and the NYSE Composite index gained 0.97, to 228.70. The NASDAQ Combined Composite fell 0.86, to 575.34.

"The stock market stabilized, and that's a relief after last week's drop," said Ricky Harrington, director of investment policy at Marion Bass Securities Corp.

Last week, the Dow Jones industrial average suffered its biggest one-week decline since November 1991, dropping 76.73 points. Many analysts expected U.S. stocks to extend the losses, given the overhanging concerns about the economy, earnings and the election.

"People weren't exactly knocking down the doors to buy stock, but at least the selling subsided for a day," said Dennis Jarrett, chief market analyst at Kidder, Peabody & Co.

" It's tough to gauge anything specific from (yesterday's) market becausemany people are out in observance of the Jewish New Year," Mr.Jarrett said.

"I don't think the stock market will move much higher until some signs emerge that an economic recovery is under way," said Richard Hoey, chief economist at Dreyfus Corp.

Trading was much lighter than recent sessions because of the Jewish holiday, with about 156 million shares changing hands on the Big Board.

Health care and drug stocks fell again amid growing concerns about the earnings outlook.

Shares of Medical Care America, which slumped 57 percent Friday, declined 2 7/8 , to 22 1/8 , after the company said that its third-quarter earnings problems will extend into the fourth quarter.

Medical Care America said the earnings problems stem from the decision the insurance company to offer discounts for its home health care business.

U.S. Healthcare, which is in a related business, fell 3 1/4 , to 61; Oxford Health Plans declined 1, to 34 1/8 ; and Value Health Inc. dropped 2, to 25 3/4 . All three companies were removed from Smith Barney, Harris Upham's "buy" list.

Merck was lower for a third straight session amid concerns that the company's earnings will fall below investors' expectations. Merck said new prescription statistics for August revealed declines for the company's two biggest drugs and disappointment with its newest potential blockbuster.

New prescriptions for Merck's Vasotec, to treat hypertension and congestive heart failure, fell 2 percent in August as competitors took patients away, analysts said. New prescriptions of Mevacor, a cholesterol-reducing drug, dropped 5 percent.

Meanwhile, information on Proscar, a treatment for enlarged prostate, may have struck some as disappointing. In keeping with Merck's marketing practices for a new drug, doctors have been giving the new drug to patients for free, thereby crimping prescription counts. Analysts said it's too early to determine sales trends for Proscar.

The slide in Merck continues to drag other drug stocks lower.

Medical Care America, Merck & Co., U.S. Healthcare, General Motors and Glaxo holdings Plc were the five most actively traded stocks on the U.S. Composite.

Microsoft stumbled 1 3/4 , to 77, on news that the company is delaying shipment of its Windows NT software until at least early 1993.

Sears, Roebuck slid 3/8 , to 41 1/4 . Moody's Investors Service lowered its rating on Sears' debt because of heavy losses at the company's Allstate insurance business.

Chemical Banking rose 3/4 , to 32 1/8 , after Oppenheimer & Co. added the stock to its short-term "buy" list.

Goodyear Tire & Rubber slumped 5/8 , to 58 3/8 , after the company's chief financial officer, Oren Shaffer, resigned after 24 years with the company.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.