Stocks rise on trade accord with Japan

June 29, 1995|By Bloomberg Business News

NEW YORK -- U.S. stocks rose for the first time in four days yesterday, after the United States and Japan announced that they had reached a trade agreement intended to widen access to Japanese markets for U.S. exporters.

The accord, which canceled $5.9 billion worth of U.S. tariffs on luxury Japanese autos, eased concern that the two nations would institute further sanctions and disrupt trade. Japan is the United States' second-biggest trading partner, after Canada.

"Let's face it, a trade war is not going to help anybody," said John Gardner, chief investment strategist at Van Liew Capital.

The Dow Jones industrial average rose 14.18, to 4,556.79, after sliding as much as 13.84 points earlier. It was the 30-stock average's first gain since June 22 and only its second rise in the past seven days.

Shares of Exxon Corp., Chevron Corp., Merck & Co. and International Paper Co. rose the most.

Share prices nose-dived shortly before the close, then recovered, amid speculation that Microsoft Corp. will delay introduction of Windows 95, a long-awaited computer operating system expected to spur sales of new software and semiconductor products.

Microsoft's stock, which closed up $1, at $87.875, slid as much as $2.94 on concern that the 22.5 million copies of Windows 95 targeted for sale this year would reach the market late. Microsoft denied there would be any delay.

Technology stocks "have had a fair amount of expectations built into them because of the release of Windows 95," said James Engle, chief investment officer for Wood, Struthers & Winthrop, which manages about $1.25 billion in equity. "You may see a broad-based decline as we get closer and closer to the August release date."

Among technology issues, shares of Motorola Inc. fell $1.25, to $64.25; Texas Instruments Inc. fell $4, to $132.75; Micron Technology Inc. fell $1.375, to $53.50; Applied Materials Inc. sank $1.50, to $82.75; Dell Computer Corp. dropped 25 cents, to $59.25; and Digital Equipment Corp. fell 62.5 cents, to $40.

Among broad market indexes, the Standard & Poor's 500 index rose 2.3, to 544.73, its first gain in four days. The technology-laden Nasdaq composite index, meanwhile, rose 0.96, to 920.52, after dropping as much as 6.54 points earlier.

About six stocks rose for five that fell on the New York Stock Exchange, where about 368 million shares traded hands. The three-month daily average is 341 million.

Shares of auto part companies rallied on optimism that orders will pick up as Japanese auto companies increasingly turn to U.S. manufacturers. Dana Corp. jumped $1.25, to $28; Magna International Inc. rose 62.5 cents, to $41.625; Automotive Industries Holdings climbed $2, to $27.50; and Superior Industries International Inc. spurted 37.5 cents, to $31.25.

Oil stocks continued to rebound after wilting last week on concern that the 12-member Organization of Petroleum Exporting Countries will boost production in 1996 and drive down oil prices.

Last week alone, the S&P international oil index of six stocks shed 2.5 percent. Late Monday, Mobil Chairman Lucio Noto said he expects the company to increase earnings by $1 billion by 1998.

Shares of Mobil surged 75 cents, to $98.25; Exxon gained $1.50, to $72.125; Chevron spurted $1.125, to $48.375; Texaco Inc. rose 50 cents, to $67; and Amoco Corp. rose 62.5 cents, to $67.125.

Optimism about the trade accord offset concern that second-quarter earnings won't meet expectations.

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