Oil shares' advance leads market rise Computer, semiconductor stocks recover after weeklong slump

March 27, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK -- U.S. stocks rose yesterday as oil shares gained on optimism that a jump in crude prices will fuel 1996 profits. Computer and semiconductor issues rebounded from a weeklong drop, furthering the advance.

Shares of Mobil Corp., Exxon Corp. and Chevron Corp. climbed as investors sought to capitalize on the 21 percent rise in oil prices so far this year. Many oil companies' stocks are up less than half that, and some investors say the performance lag is a disparity worth exploiting.

The Dow Jones industrial average rose 26.74 to 5,670.60, its third gain in a row. The 30-stock average, which rebounded from a loss of 19.51 points earlier in the session, wound up 13 points below its all-time high registered March 18. Exxon Corp. rose $2.375, to $86; Chevron climbed $1.25, to $57.125; and Texaco Inc. rose $1, to $88.375.

Shares of Triton Energy Ltd. surged $8.25, to $59.75, after the company found a major new oil area deep underground in Colombia, among the biggest in the world.

The find continued a string of good bets the company has made in its exploration of high-risk areas throughout the world.

International Business Machines Corp. surged $2, to $110.75, and was the Dow's biggest gainer.

The broad market also gained. The Standard & Poor's 500 index rose 2.93 to 652.97, erasing a 1.89-point loss, and the Nasdaq composite index climbed 1.26 to 1,088.35, after giving up 7.19 points at the start.

The Russell 2,000 index of small capitalization stocks fell 0.01 to 327.71; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, jumped 17.08 to 6,398.3; the American stock Exchange market value index rose 0.93 to 568.71 and the S&P 400 Midcap index rose 0.06 to 228.96.

Yesterday's most active stocks in U.S. composite trading were Bay Networks, Cisco Systems Inc., Sun Microsystems Inc., 3Com and Intel.

The rebound in stock prices came after the Federal Reserve's policy-making committee elected to keep the federal funds rate at 5.25 percent.

Some 1,235 shares rose and 1,116 fell on the New York Stock Exchange, where 404.28 million shares changed hands. Volume was below the recent average of 417.4 million shares for the fifth straight session.

Still, yesterday's activity sent the total value of all stocks traded this year on the Big Board past the $1 trillion mark. It was the fastest that level had been eclipsed in the exchange's history. Last year, the $1 trillion level was reached on May 12, some 32 trading days later in the year.

The Philadelphia Semiconductor index rose 1.46 to 175.34 after falling 5.19 points Monday. Among the gainers, Novellus Systems Inc. rose $1.50, to $45; Texas Instruments Inc. gained $1, to $51.25; and Intel Corp. gained $1.234375, to $56.125.

Other industry competitors fell. Shares of Bay Networks Inc. plunged $4.50, to $28.50, after Compaq Computer Corp. introduced a product line targeting the $10 billion-a-year market for computer networking equipment. 3Com Corp. dropped $2.375, to $39, and Cabletron Systems Inc. slid $1.375, to $66.50. HBO & Co., which sells computer systems to the health-care industry, fell $5.25, to $88.50.

Drug stocks gained, led by Pfizer Inc. The New York-based company's stock rose $1, to $68.75, amid speculation that the drug company is considering a merger with Glaxo Wellcome Plc. Officials at London-based Glaxo declined to comment.

Warner-Lambert Co. rose $1.375, to $105.625, and Glaxo's American depositary receipts climbed 62.5 cents, to $25.50.

Merck & Co.'s stock rose $1.625, to $64.125, regaining all of Monday's drop. The gain came a day after Merck strengthened the warning on its new osteoporosis drug Fosamax because 35 women experienced worse side effects than expected. Some analysts said the drug's long-term potential won't be hurt.

Pub Date: 3/27/96

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