Computer shares' resurgence spurs rise Hewlett-Packard, Compaq, Digital lead high-tech recovery

June 28, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK -- U.S. stocks rose yesterday as investors clamored for recently depressed computer-related shares and interest-rate sensitive utility issues. The Nasdaq composite index revived after two days of losses.

Profit concerns at Procter & Gamble Co. and Union Carbide Corp. dragged the Dow Jones industrial average lower.

The Dow slid 36.20 points before rebounding to 5,677.53, down 5.17. Gainers beat losers 1,324 to 1,037 on the New York Stock Exchange.

Volume was 405.6 million shares, up from 386.5 million Wednesday.

The Standard & Poor's 500 index rallied 4.16, to 668.55, after dropping almost 3 points earlier in the day. Hewlett-Packard Co. led gainers, rising $3.75, to $98.875. Compaq Computer Corp. leaped $2, to $48.875, and Digital Equipment Corp. bounded $4.125, to $46, more than recapturing its losses of the past two days.

The Philadelphia computer index rose 5.75 points to 263.47, or 2.2 percent. The 26 stock index -- which houses Compaq, Hewlett-Packard and Digital, among others -- is still down about 4 percent for the month.

The Nasdaq composite rose 12.72, or 1.1 percent, to 1,166.01. Top gainers were No. 1 chip maker Intel Corp. and software and hardware producer Oracle Corp.

Intel rose $1.375, to $73.875; Oracle gained $2.125, to $39.50; and Cisco Systems Inc. climbed $1.50, to $54.875.

Micron resisted the upward tug on computer-related shares, falling 37.5 cents, to $25.375.

The Russell 2,000 index of small capitalization stocks rose 2.14, to 341.95; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, added 36.21, to 6,566.27; the American Stock Exchange market value index fell 5.50 to 570.13; and the S&P midcap index rose 1.43, to 232.64.

HTC Consolidated Natural Gas Co. rose $1, to $51.75; Houston Industries Inc. climbed 75 cents, to $24; and Peco Energy Co. jumped 62.5 cents, to $25.

The Dow Jones utility average, up for a seventh straight day, made its biggest advance since May 22, rising 2.86, to 215.90.

Phone companies, burdened with large debt costs, bounced on news of falling yields. BellSouth Corp. rose $1.125, to $41; SBC Communications Inc. climbed 62.5 cents, to $49.125; and Ameritech gained $1, to $58.375.

The yield on the benchmark 30-year Treasury bond fell 4 basis points to 6.99 percent, its first time below 7 percent in three weeks.

Procter & Gamble, which makes Charmin toilet paper, said it would take a $150 million charge against fiscal fourth-quarter earnings because a paper contract forced the company to pay higher-than-current-market prices. Concern about price wars in cereals and toothpaste also hurt its shares, an analyst said.

Quaker Oats Co. dipped $2, to $33.75, after the cereal and beverage company said its Snapple beverage line would report a loss for the year and that price cuts on breakfast cereals would claim $30 million to $40 million from its bottom line.

Shares of paper companies retreated. Investors braced for disappointing profits as pulp and paper rates fell for a fourth straight quarter. Champion International Corp. dropped 87.5 cents, to $42.125; Bowater Inc. fell 87.5 cents, to $37.75; and International Paper Co. fell 50 cents, to $37.375.

Pub Date: 6/28/96

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