NEW YORK -- U.S. stocks rose yesterday amid optimism that second-quarter profits will match or exceed estimates. Steady-earning consumer product companies such as Procter & Gamble Co. and Gillette Co. paced the gain.
Walgreen Co., a benchmark for retailers, brightened the outlook for profits after it said net income in the quarter ended May 31 climbed more than 15 percent.
The Dow Jones industrial average rose for a fifth day, climbing 12.56 to 5,717.79 -- its highest since May 24. The 30-stock average is now just 60.21, or about 1 percent, from its all-time high of 5,778. Coca-Cola Co. helped P&G and Philip Morris Cos. fuel the advance.
Among broad market indexes, the Standard & Poor's 500 index rose 2.01 to 668.85 -- its third gain in a row -- and the Nasdaq composite index rose 7.57 to 1,182.91.
The Russell 2,000 index of small capitalization stocks rose 1.61 to 346.82; the Wilshire 5,000 index rose 21.83 to 6,597.02; the American Stock Exchange market value index rose 0.19 to 585.14; and the S&P 400 midcap index rose 0.21 to 235.17.
Yesterday's most active stocks in U.S. composite trading were Westinghouse Electric Corp., Intel, Cyrix, ValuJet Inc. and Amgen Inc.
The Morgan Stanley index of 30 consumer stocks rose 2.03 to a record 310.97. H.J. Heinz Co., which makes StarKist tuna and Ore-Ida frozen potatoes in addition to ketchup, told analysts last week that it expects a 10 percent to 14 percent rise in profits during the year ended April 30, 1997.
Procter & Gamble rose 75 cents to $91.50; Gillette climbed $1.625 to $60.50; American Home Products Corp. jumped $1.25 to $59; Colgate-Palmolive Co. jumped $2.125 to $85.375; McDonald's Corp. was up 75 cents at $47; and Walgreen rose 50 cents to $33.375.
About 1,338 shares rose and 1,019 fell on the New York Stock Exchange, where about 334 million shares changed hands.
Shares of companies that make products for or provide access to the Internet gained after Lauren Rich Fine, an analyst at Merrill Lynch & Co., said the 40 percent drop in America Online Inc.'s stock since May 7 is overdone.
America Online is adding subscribers at a pace to put it at 10 million customers in 12 months to 18 months, Fine said.
Vienna, Va.-based America Online rose $2.25 to $42.125; Netscape Communications Corp. jumped $3.25 to $58.25; Cybercash Inc. rose $3.25 to $49; and PsiNet Inc. gained 25 cents to $12.75.
Steady interest rates helped share prices rise, traders said. The yield on the 30-year Treasury bond was 7.08 yesterday, down 0.01 from 7.09 percent Friday.
Higher rates are bad for stocks because they encourage people to put their money in fixed-rate investments that are perceived as less risky.
"The stock market is going to follow interest rates," said Barry Berman, head of Nasdaq trading at Robert W. Baird & Co.
Bank shares rose, helped by the steadying bond market. Also feeding the advance was Morgan Stanley Group Inc.'s agreement to buy Van Kampen/American Capital Inc. for $745 million in cash and preferred stock.
The S&P 500 money center banks index rose 3.01 to 264.29. Citicorp rose $1.125 to $81.625; BankAmerica gained $1.125 to $74.25; and First Chicago NBD Corp. gained 62.5 cents to $40.50.
Pub Date: 6/25/96