Stocks are mixed as oil issues rally

April 23, 1994|By Bloomberg Business News

NEW YORK -- U.S. stocks closed mixed yesterday as oil issues rallied along with higher crude oil prices, offsetting slumping utility and bank company stocks.

The Dow Jones industrial average fell 3.86, to 3,648.68.

Texaco Inc., Chevron Corp. and Exxon Corp. climbed as Texas crude oil for delivery in June jumped 51 cents a barrel, to $17.14, its highest since Nov. 4. Exxon and Mobil Corp. also reported strong first-quarter earnings.

"We like energy [stocks] because prices have stabilized and are likely to move up," said Peter Anderson, chief investment officer at IDS Advisory Group in Minneapolis, which manages $12.5 billion of assets.

In the broader market, the Nasdaq combined composite index gained 3.82, to 722.56, boosted by gains in Amgen Inc. and technology stocks. Amgen, a biotechnology company that gained $5, to $42.125, reported stronger-than-expected first-quarter earnings of 66 cents a share, up from 55 cents a year ago.

Mr. Anderson also favors buying technology stocks such as Intel Corp., Cisco Systems Inc., Compaq Computer Corp., and Lotus Development Corp.

"The stocks are insanely, ridiculously cheap," he said, "and the personal computer cycle is not about to roll. We think the PC cycle will surprise on the upside and be longer and stronger than some people think."

The Standard & Poor's 500 index dropped 1.10, to 447.63, as declines in telephone, utility, retail and bank stocks outweighed gains in drug, broadcast and software companies.

Almost 11 stocks advanced for every eight that fell on the New York Stock Exchange, where volume dropped to 297.5 million shares from 378.7 million Thursday.

Renewed confidence in the strength of corporate earnings helped boost stock prices yesterday, analysts said.

Strong earnings are an outgrowth of a robust economy. "The economic fundamentals are terribly sound," Mr. Anderson said. "I don't think we're going to have hypergrowth or slip into a recession."

Instead, both economic growth and inflation will probably average 3 percent this year.

Among oil companies, Mobil rose $2.25, to $78.375. The firm said first-quarter net income rose to $1.31 a share from $1.19, above analysts' estimate of $1.12 a share.

Exxon gained 62.5 cents, to $63.125. The company said net income fell to 92 cents a share from 94 cents, surpassing analysts' forecast of 83 cents.

Texaco surged $1.125, to $65, and Texaco added 25 cents, to $90.25.

Other companies reporting strong earnings this week included Compaq, which said Wednesday that first-quarter earnings doubled.

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.