Computer-guided 'buy' orders spur rise in stocks

April 21, 1995|By Bloomberg Business News

NEW YORK -- U.S. stocks rose yesterday amid six rounds of computer-guided "buy" orders, led by shares of oil companies and International Business Machines Corp.

Traders said yesterday's gains were spurred largely by trades related to today's "double-witching," the simultaneous expiration of index options and options on individual stocks that happens once a month.

"IBM earnings are fantastic, and that's helped stocks overall," said Louis Todd, head trader at J. C. Bradford & Co. in Nashville, Tenn.

IBM's stock climbed $1.875, to $89, after the computer maker reported that it earned $2.12 a share in the first quarter, more than three times what it earned last year. The results surpassed Wall Street's average estimate of $1.35.

Gains by IBM accounted for about 4.8 points of the advance in the Dow Jones industrial average, helping to push the index up 23.17, to 4,230.66, its 18th record high this year. IBM, Texaco Inc. and DuPont Co. led the advance.

Some 1,160 stocks advanced and 1,016 shares declined on the New York Stock Exchange.

Oil stocks continued to advance as the price of crude oil rose for the fourth consecutive session. The shares also got a boost after Schlumberger Ltd. announced its first-quarter earnings rose 21 percent and raised its dividend by 25 percent on optimism about rising demand for oil. Schlumberger surged $3.625, to $63.50.

The Standard & Poor's oil index of six stocks climbed 6.92, to 454.21, its biggest gain since Oct. 6, 1994. Texaco rose $1.50, to $67.875. Chevron was up $1.25, to $46.75, and Exxon Corp. jumped $1.25, to $69.75.

Sears, Roebuck & Co. gained 87.5 cents, to $53, after it, too, reported better-than-expected earnings. The retailer's earnings were boosted by strong improvements at its Allstate Insurance Group.

The S&P 500 index added 0.37 yesterday, to 505.29. Gains in oil, computer, and chemical issues countered losses in auto, telephone and major regional bank shares.

Chrysler Corp. slumped $1.75, to $44.625. Late Wednesday, the automaker said Bear Stearns Cos. had "decided not to be involved" in a takeover attempt led by financier Kirk Kerkorian. Last Wednesday, Chrysler stock surged $9.50, to $48.75, on an announcement of a $20.5 billion bid led by Mr. Kerkorian's Tracinda Corp. investment company. The company was also lowered to "hold" from "buy" yesterday at S. G. Warburg & Co.

The Nasdaq composite index climbed 2.46, to 819.01, following a 2.6-point dip earlier in the day, led by MCI Communications Corp., DSC Communications Corp. and Qualcomm Inc.

Trading fell to 365.7 million shares from 377.6 million yesterday, but was still above 319.68 million average trading volume over the past six months.

MCI climbed 50 cents, to $22.625, after it announced Wednesday that first-quarter earnings rose 17 percent. DSC Communications Corp.'s stock rose $2.125, to $34.875.

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