NEW YORK -- U.S. stocks climbed yesterday as Exxon Corp., Mobil Corp. and other oil shares rallied to records on expectations of robust profits next year.
Frigid temperatures in the Midwest and Northeast briefly sent the price of oil past $19 a barrel to a six-month high. The weather, coupled with the companies' above-average dividends, suggested oil stocks may outpace other issues this winter.
The Dow Jones industrial average rose 27.46 points, to 5,184.32, recovering from two days of losses that drove it from a record close of 5,199.13 Dec. 6. The average, which includes shares of Exxon, Texaco and Chevron Corp., also was helped by gains in Minnesota Mining & Manufacturing Co. and Eastman Kodak Co.
The Standard & Poor's 500 index, which represents about three-quarters of the value of all stocks traded in the country, rose 2.04, to 619.52, just short of its Dec. 6 record of 620.18. It was the index's eighth gain in the last 10 sessions. Along with oil stocks, shares of telephone, auto, beverage and tobacco companies gained.
Nasdaq's composite index, filled with technology shares, fell 0.92, to 1,061.49, after jumping 9.24 to 1,062.41 Friday. Among advancing issues, Applied Materials Inc. rose $1.75, to $47.625; Glenayre Technologies Inc. gained $5.75, to $59; and Intel Corp. rose 25 cents, to $63.50. Among the losers, Microsoft Corp. fell $1.375, to $93.125, and Novell Inc. dropped 87.5 cents, to $14.875.
Shares of Compaq Computer Corp. jumped 87.5 cents, to $49.25, on expectations that overseas demand for computers will help profits blossom, traders said.
Advancing stocks matched decliners on the New York Stock Exchange, where 342 million shares traded hands. That is less than the three-month daily average of about 365 million.
Among the most actively traded stocks in the United States, shares of Maybelline Inc. surged $5.25, to $36.25. France's L'Oreal SA said it had agreed to buy Memphis, Tenn.-based cosmetics maker Maybelline for $36.75 a share, or about $598 million.
The S&P index of six oil stocks rose 13.34, or 2.5 percent, to a record 529.91. During the past six months, the index has gained 12.6 percent, lagging the 16.7 percent gain of the S&P 500.
Among yesterday's biggest gainers, Exxon rose $2.375 to a record $84.125; Chevron surged $1.5625 to an all-time high of $52.75; Amoco rose $2.50 to a record $71.25; Texaco rallied 75 cents to a record $79.125; and Mobil gained $3.125 to a record $113.625.
The gain in oil stocks was partially offset by losses in paper issues, which fell amid concern that increased production to take advantage of high prices will eventually flood the market and cause prices to fall.
On Friday, the American Forest & Paper Association said U.S. pulp and paper industry plans to increase its manufacturing capacity by 2.5 percent a year through 1998, faster than the 2 percent-a-year increase forecast last year for 1994 through 1997.
"Capacity is expected to increase at a rate faster than likely demand growth over the next 12 to 18 months," analyst Sherman Chao of Merrill Lynch & Co. told clients yesterday. He cut his investment opinion on 11 paper stocks.
Shares of International Paper Co. fell 50 cents, to $36.50; Bowater Inc. fell $1, to $35.25; Georgia-Pacific Corp. lost $2.25, to $71; Champion International Corp. shed $1.625, to $42.875;and Louisiana-Pacific Corp. dropped 62.5 cents, to $24.875. After the close of trading, Georgia-Pacific said fourth-quarter earnings would fall substantially below analysts' forecasts of $3 a share.
Bank issues fell yesterday amid concern that interest rates may not fall soon. Citicorp fell $2.0625, to $67.75; Norwest Corp. fell 87.5 cents, to $33.125; NationsBank Corp. dropped 62.5 cents, to $73; Fleet Financial Group Inc. fell 62.5 cents, to $41.25; and Bank of Boston Corp. gave up 87.5 cents, to $46.625.
Among broad market indexes, the Russell 2,000 index of small capitalization stocks rose 0.52, to 312.07; the Wilshire 5,000 index, composed of stocks on the New York, American and Nasdaq stock exchanges, rose 16.43, to 6,073.58; the AMEX market value index rose 0.1, to 535.65; and the S&P 400 midcap index fell 0.28, to 217.55. Yesterday's most active stocks in U.S. composite trading were Hanson PLC's American depositary receipts, Novell, Sun Microsystems Inc., Micron Technology Inc. and 3Com Corp.