Technology and cyclical issues give Dow a lift Industrials close up 22.04 points, ending 3-day slide

October 06, 1995|By BLOOMBERG BUSINESS NEWS

NEW YORK -- U.S. stocks snapped a three-day slide yesterday as technology companies, together with chemical, paper and aluminum issues, rebounded from recent losses.

Renewed optimism that technology companies' earnings will continue to beat those of other companies helped trigger the latest advance, as did a fifth day's rally in Treasury bonds.

The Dow Jones industrial average climbed 22.04, to 4,762.71, boosted by gains in Aluminum Co. of America, DuPont Co., AlliedSignal Inc. and Sears, Roebuck & Co.

In the broader market, the Standard & Poor's 500 index rose 1.16, to 582.63, and the Nasdaq composite index, laden with technology stocks, surged 11.93, to 1,014.20. It was the largest gain in the Nasdaq -- and the Morgan Stanley high-tech index, up 11.36, to 316.43 -- in a week.

The Russell 2000 index of small-company shares rose 0.39, to 301.21, and the Wilshire 5000 index grew 14.36, to 5,753.61.

Fewer than 12 stocks rose for every 11 that fell on the New York Stock Exchange. Volume totaled 367.5 million shares, above this year's average of 337.9 million.

L. M. Ericsson Telephone Co. rights, Intel Corp., Klamath First Bancorp, Kmart and Microsoft Corp. were the most active issues in composite trading.

Klamath rose $2.50, to $12.50. The bank converted to a savings and loan by selling 12.23 million shares at $10 a share in an initial public offering late yesterday.

Much of the market took its cue from technology. Stocks of personal computer, semiconductor and software companies slid during the past four days amid concern that third-quarter earnings might not meet forecasts and that increased supplies of semiconductors may drive down prices.

In that span, the Morgan Stanley high-tech index shed 8.4 percent.

Among computer networking stocks yesterday, Bay Networks Inc. spurted $5, to $55.375; 3Com Corp. added $3.125, to $45.50; and Tellabs Inc. jumped $3.50, to $40.50.

Informix Corp. rose $1.125, to $30.25; Progress Software Corp. shot ahead $2.75, to $67.25; Cyrix Corp. gained $1.125, to $39.75; Atmel Corp. spurted $2.125, to $32; and Gasonics International Corp. rose $2, to $31.25.

Other technology companies posting large gains were Linear Technology Corp., up $2.375, to $39.75; Electronic Arts Inc., ahead $2.50, to $35.50; America Online Inc., up $1.3125, at $61.3125; and Autodesk Inc., ahead $2.375, at $41.25.

So-called "cyclical" stocks, whose businesses are closely tied to strength or weakness in the economy, rebounded from four days of declines.

DuPont climbed $2, to $67.125; International Paper Co. gained 62.5 cents, to $39.50; and Dow Chemical Co. added 50 cents, to $74.

Among chemical makers, Praxair Inc. jumped $1, to $25.375 and B. F. Goodrich Co. advanced $1.125, to $62.625. Among aluminum producers, Alcoa rose $2.125, to $51.625 and Reynolds Metals Co. increased $1.125, to $55.

Auto stocks also improved as some investors expected that economic growth will accelerate in the fourth and first quarters. General Motors Corp. rose 50 cents, to $44.875, and Ford Motor Co. added 37.5 cents, to $30.125.

Share prices got a lift from one round of computer-guided orders to buy stocks, as the yield on the 30-year Treasury bond fell to 6.40 percent, its lowest since February 1994, before finishing at 6.42 percent, traders said.

A handful of disappointing September sales reports from retailers -- including J. C. Penney Co., Kmart Corp., AnnTaylor Stores Inc. and Talbots Inc. -- damped individual stocks.

J. C. Penney shares fell $1.375, to $47.625 on news that the department store chain's same-store sales grew by 2 percent in September.

Kmart said it expects third-quarter profits "well below" a year ago because of its struggling Builders Square chain and efforts to clear out less profitable goods. The stock fell 75 cents, to $12.75.

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