Exxon, Amgen strong U.S. stocks gain

WALL STREET

July 24, 1993|By Bloomberg Business News

NEW YORK -- U.S. stocks gained yesterday, led by computer-driven buy orders and the release of surprisingly strong earnings from companies like Exxon Corp. and Amgen Inc.

"The bull market continues to trudge along," said Alfred Goldman, market analyst at A. G. Edwards & Sons Inc. "Overall, second-quarter earnings are strong and that's helping this market."

The Dow Jones industrial average rose 21.52 to 3546.74, recouping much of Thursday's 30.18-point slump and closing just below its record 3555.40. The average was up 18.45 for the week.

Yesterday's advance was led by Walt Disney Co., which rose $2.125 to $39.25 after the stock was added to the analyst "buy" list at Prudential Securities Inc.

Exxon also gave the average a boost. It rose $1 to $65.125 after the nation's biggest oil company reported second-quarter net income advanced to 98 cents a share from 73 cents, largely because of cost cutting and one-time gains. Analysts expected Exxon to earn 88 cents, according to Zacks Investment Research.

The Nasdaq Combined Composite Index advanced 4.72 to 700.24, with Amgen and Intel Corp. accounting for much of the advance. The Standard & Poor's 500 Index rose 2.59 to 447.10. The American Stock Exchange Market Value Index gained 0.69 to 432.05.

Advancing common stocks led declining issues by more than 8 to 7 on the New York Stock Exchange. The biggest gains were recorded in the international oil, entertainment and health care industries.

The rise in stocks surprised some analysts, who expected stocks to stumble as long-term interest rates rose for a fourth straight day. The yield on the benchmark 30-year bond rose to 6.7 percent from 6.66 percent. Stocks become less attractive relative to fixed-income securities when bond yields rise.

"The stock market held up well considering the rise in interest rates," said Lance Zipper, a senior trader at Kidder, Peabody & Co.

The Dow industrials and broader market averages would set records in the next several weeks, said Mr. Goldman of A. G. Edwards. The S&P 500's record is 456.34, set March 10, and the Nasdaq composite's record is 712.49, set July 14.

Yesterday, trading on the New York Stock Exchange was the least active since Monday, as about 218.1 million shares changed hands.

Petsmart Inc., Telefonos de Mexico S.A., USX-U.S. Steel Group Inc., Nextel Communications Inc. and Gerant Cos. were the five most actively traded issues on the U.S. Composite.

Petsmart traded at $25, up $7 from its initial public offering price. The operator of pet food and supplies stores sold 7.2 million shares Thursday at $18 through Donaldson, Lufkin & Jenrette.

Telmex's American depositary receipts, which each represent 20 Series L shares, rose $2.875 to $49.125. The telecommunications company said first-half earnings totaled 4.142 billion new pesos ($1.33 billion), up 3.63 percent from the prior year. Salomon raised its investment rating on the Mexican company to "buy."

Campbell Soup Co. declined $2.625 to $36.875. The food company said it would take a charge to 1993 earnings of between 98 cents a share and $1.03 to adopt three new accounting standards. The company was also removed from the recommended-for-purchase list at Goldman, Sachs & Co.

International Business Machines Corp. fell $1.125 to $42.25.

The computer company is expected to halve its quarterly dividend to 27 cents a share and take a restructuring charge of as much as $5 billion to eliminate as many as 50,000 more jobs.

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