Rising airline stocks lift market Dow gains 19

WALL STREET

April 08, 1993|By Bloomberg Business News

NEW YORK -- Stocks closed higher yesterday, with airline issues leading the climb, fueled by government action to bolster airlines and by cost-cutting steps at UAL Corp.

The Dow Jones transportation average, which includes airline stocks, rose 36.67, to a record closing high of 1,617.82.

The Dow Jones industrial average rose 19.45, closing at a session high of 3,397.02. The Dow benefited from gains among economically sensitive issues such as AlliedSignal Inc., General Motors Corp., Goodyear Tire & Rubber Co. and Caterpillar Inc. Advances in those stocks countered further weakness in Philip Morris Cos. and Walt Disney Co.

"All these growth names have been getting killed," said Philip Smyth, a market analyst at Birinyi Associates. The rout began Friday, when Philip Morris projected a plunge of up to 40 percent in its domestic tobacco profits this year as cigarette makers slash prices to retain market share.

Airline stocks benefited from a loss of faith in consumer-products stocks like Philip Morris, traders said. UAL, which owns United Airlines, gained $9.87, to $137; AMR Corp., the parent of American Airlines, soared $3.25, to $69; Delta Air Lines rose $3.50, to $57; and USAir Group rose $3.125, to $24.25.

"People are joining the bandwagon," said John Blair, head trader at NatWest Securities. "People are selling the consumer stocks, and airlines are a beneficiary."

Airline stocks rallied after United reported a 17.4 percent increase in March traffic and President Clinton established a panel to study ways to strengthen the airline industry. The rally accelerated late in the day as UAL unveiled plans to reduce capital spending by $5.5 billion between 1993 and 1996. The cutback follows similar moves by some competitors.

Stocks were mixed for most of the day as concern about a rekindling of inflation dampened enthusiasm. Reports due today March producer prices and tomorrow on March consumer prices fueled anxiety.

The Standard & Poor's 500 index, which spent most of the session lower amid declines in food, telephone, health-care and beverage shares, closed up 1.57, to 442.73.

The Nasdaq Combined Composite index gained 4.74, to 668.88. Software shares like Adobe Systems Inc.and semiconductor issues such as Intel Corp. lifted the index.

Advancing common stocks overtook declining issues in the final hour and ended with a lead of 8-to-7 on the New York Stock Exchange. About 300 million shares changed hands on the NYSE.

Concern that years of big price increases are over for makers of brand-name products has prompted declines in recent days in companies such as Colgate-Palmolive Co. and Procter & Gamble.

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.