Stocks get good news on earnings, durable goods

October 27, 1994|By Bloomberg Business News

NEW YORK -- U.S. stocks closed mixed yesterday as a handful of companies reported better-than-expected earnings and a government report showed few signs of inflation in the economy.

Ford Motor Co., Boeing Co., Procter & Gamble Co., Sara Lee Corp. and other companies reported profits that surpassed the expectations of Wall Street analysts.

Meanwhile, the Commerce Department said orders for big-ticket goods rose 0.1 percent in September, compared with economists' expectations of a 0.2 percent increase.

The Dow Jones industrial average fell 2.36, to 3,848.23, amid declines in United Technologies Corp., International Paper Co. and Sears, Roebuck & Co.

Tomorrow, the government will report the initial estimate of third-quarter growth in gross domestic product. Many investors will be watching for evidence of inflation that could push the Fed to raise rates a sixth time this year.

"I don't think the market will do a whole heck of a lot" before tomorrow, said Philip Roth, chief technical analyst at Dean Witter Reynolds. Even then, stocks will remain "in a trading range," with the Dow industrials hovering between about 3,950 and 3,750, Mr. Roth said.

The Standard & Poor's 500 index rose 1.09, to 462.61. Gains in oil, semiconductors and tobacco companies led the index higher.

Exxon Corp. rose 87.5 cents, to $61.25, after the oil company raised its dividend 4 percent, to 75 cents a share, and a Dean Witter analyst raised his investment opinion on the stock.

The Nasdaq combined composite index rose 4.98, to 763.24. Increases in shares of Microsoft Corp., Intel Corp., and Cisco Systems Inc. buoyed the index.

Trading was active, as 322.5 million shares changed hands on the New York Stock Exchange. Four stocks fell for every three that rose on the Big Board.

The yield on the 30-year Treasury bond rose to 8.06 percent from 8.04 percent Tuesday, the highest since April 1992, as investors grew convinced the Fed will raise rates for a sixth time this year at the Nov. 15 meeting of its Federal Open Market Committee.

Pyxis Corp., which fell $2.78125, to $18.125, was the most active U.S. stock, followed by Sprint Corp., Malvy Technology Inc., RJR Nabisco Holdings Corp. and Ford.

Pyxis shares were downgraded by analysts at Merrill Lynch & Co. and Donaldson, Lufkin & Jenrette Securities Corp. a day after the maker of software used by hospitals reported disappointing earnings.

Worries about what the Fed might do next month dulled the impact of a raft of better-than-expected earnings reports by Ford, Boeing Co. and other large companies, analysts said.

Ford, the nation's No. 2 automaker, closed unchanged, at $29.25, after posting earnings of $1.04 a share in the third quarter, up from 40 cents last year. The mean estimate of 19 analysts was for earnings of 68 cents a share, according to IBES.

Procter & Gamble Co. rose 12.5 cents, to $62.25, after the maker of household products earned $1.12 a share in its fiscal first quarter, up from 95 cents a share a year earlier. The results beat the mean estimate of 13 analysts by 2 cents, according to IBES.

Sara Lee Corp. rose $1.125, to $24, after the food company posted earnings of 33 cents a share in its fiscal first quarter, up from 24 cents a share last year, including extraordinary charges. The mean estimate of analysts was 32 cents.

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