Wal-Mart, technologies lift stock market averages

March 01, 1995|By Bloomberg Business News

NEW YORK -- U.S. stocks rose yesterday for the fourth time in five days as better-than-expected earnings at Wal-Mart Stores Inc. and a rally in technology shares overcame concern about the failure of British investment bank Barings PLC.

The nation's No. 1 retailer saw its stock jump as much as 3.7 percent after reporting that fourth-quarter earnings rose 19 percent, paced by a 20 percent sales increase. The Bentonville, Ark.-based company earned 45 cents a share, marking its 96th straight quarter of record sales and earnings. The shares closed up 37.5 cents, at $23.75.

The Dow Jones industrial average rose 22.48, to 4,011.05, just below Friday's all-time high of 4,011.74, after being little changed most of the day. A computer-guided "buy" program that kicked in about 2:30 p.m. accounted for 5.88 points of the gain, according to Birinyi Associates.

General Electric Co., International Business Machines Corp. and DuPont Co. rose the most. The 30-stock average gained 4.3 percent in February -- its best month since January 1994's 6 percent gain.

Among broad market indexes, the Standard & Poor's 500 index rose 3.58, to 487.39 -- below its all-time closing high of 488.26, recorded on Friday. The Nasdaq composite index, laden with technology issues, rallied 9.23, to 793.73, more than recovering yesterday's 6.59-point decline. Gains in Microsoft Corp., Intel Corp., Amgen Inc. and Oracle Systems Corp. paced the advance.

Corporate profit growth, which has fueled the rise in major stock indexes and averages to records during the last week, remains strong overall and helped stocks, analysts said.

"The market is looking for earnings gains," said Barry Berman, head trader at Robert W. Baird & Co. in Milwaukee, Wis.

The gains in stocks came a day after London-based Barings PLC crumpled under the weight of about $1 billion in losses from speculative trading in Asian markets. Yesterday, Japan's Nikkei 225 average rose 1.46 percent after plummeting 3.8 percent Monday. It was one of the largest bank failures in British history and raised concern about similar problems among domestic institutions.

"This Barings debacle is still weighing on the market," said Basil Asciutto, managing director of trading at Commonwealth Associates in New York. "If you pick up the paper and see nothing but bad news, it's hard to get up and buy stocks."

Some 1,600 stocks rose for every 600 that fell on the New York Stock Exchange, where about 317.7 million shares traded hands. It was the fourth time in the last five days that advancing issues beat decliners.

The Russell 2000 index of small capitalization stocks rose 2.71, to 256.57; the Wilshire 5,000 index added 39.13, to 4,803.91; and the Amex market value index rose 4.27, to 452.71.

Semiconductor, computer and software issues gained amid optimism that businesses will stock up on computers and cellular phones to become more efficient, traders said. The Pacific Stock Exchange technology index of 100 stocks surged 4.51, to 287.78.

Health-care issues rose as investors sought shares of companies whose earnings are less affected by a slowdown in the economy. Also, a Republican bill that seeks to overhaul federal nutrition programs for children and pregnant women could mean a gain of about $1 billion for companies like Abbott Laboratories, Bristol-Myers Squibb Co. and American Home Products Co., the Wall Street Journal reported.

The S&P health care index of seven stocks rose 1.62, to 413.75. Abbott gained 37.5 cents, to $35.50; Warner-Lambert Co. jumped $1, to $76.50; American Home added 50 cents, to $71.50; and Bristol-Myers rose 12.5 cents, to $61.875.

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