Stocks climb for second day Dow gains 20.31

June 11, 1994|By Bloomberg Business News

NEW YORK -- U.S. stocks rose for a second day yesterday amid rallies in oil and semiconductor shares and active dividend-related trading in the stock of Hanson PLC.

"Over all, it's a very quiet day, with some strength in the semiconductor stocks," said Todd Clark, senior block trader at Mabon Securities. "It's been like this all week."

The Dow Jones industrial average rose 20.31, to 3,773.45. Aluminum Co. of America, Caterpillar Inc. and Bethlehem Steel Corp. were the biggest gainers in the average.

The Standard & Poor's 500 Index added 0.81, to 458.67, powered by gains in semiconductor, oil and telephone companies.

The Nasdaq combined composite index climbed 5.37, to 734.25, driven by rallies in Intel Corp., Oracle Systems Corp. and Novell Inc.

Just 223 million shares changed hands by the close of trading on New York Stock Exchange, the lowest total since May 31, the Tuesday following Memorial Day. About 11 stocks rose for every eight that fell.

Hanson accounted for more than 20 million shares traded. That's more than 10 times the daily trading average for Hanson shares during the past three months.

Institutional investors swapped multimillion-share blocks of the British conglomerate's American depositary receipts back and forth. The prearranged trades allow institutions to own the stock for long enough to receive Hanson's next dividend and to obtain U.K. withholding tax credits that would otherwise go to tax-exempt investors, such as pension funds.

Hanson will pay a dividend of 15.94 pence per ADR, or about 24 cents, on July 8 to shareholders of record June 16. That amount excludes a 15 percent withholding tax imposed by the U.K. on dividends received by foreign investors.

Chip makers' shares rose after a better-than-expected report late Thursday on semiconductor orders in May. The Semiconductor Industry Association said its book-to-bill ratio for May was 1.14. This means the industry received $114 million in orders for every $100 million in shipments.

Analysts had expected a ratio of about 1.12. The May figure was down from 1.15 in April, reflecting a traditional slowdown in sales during the summer.

Shares of Intel Corp. rose 98.44 cents, to $59.9844; Motorola Inc. rose $1.25, to $46; Texas Instruments Inc. rose $2.375, to $77.25; Advanced Micro Devices rose 75 cents, to $26.75; Applied Materials Inc. rose $1.25, to $40.

Oil stocks rallied amid gains in crude oil prices, up more than $1 a barrel since Tuesday, on concern about tight supplies in the Midwest. Crude for July delivery traded as high as $18.89 a barrel yesterday before closing at $18.49, down 18 cents.

"This is a positive period for oil prices, and that is driving the whole group higher," said Stephen Smith, an oil company analyst at Bear, Stearns & Co.

Shares of Royal Dutch Petroleum rose $1.625, to $107.50; Chevron Corp. added $1.125, to $90.75; British Petroleum Plc's ADRs rose $3.25, to $71; and Mobil Corp. gained $1.125, to $82.375.

Stocks were little changed in early trading after a Labor Department report that producer prices dropped 0.1 percent last month, and rose a larger-than-expected 0.4 percent excluding food and energy.

The yield on the benchmark 30-year Treasury bond was little changed after the producer prices report. The yield rose to 7.31 percent from 7.28 percent at Thursday's close.

Hanson was the most actively traded U.S. issue, followed by Pepsico Inc., Centocor Inc., IDB Communications Group Inc. and Electronic Arts Inc.

Centocor said the Food and Drug Administration recommended approval for ReoPro, a drug used to prevent blood clotting in patients undergoing angioplasty. The stock rose $1.1875, to $13.0625.

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