Stocks rebound, with Dow rising 31 Strong earnings brake 4-day skid

July 10, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK -- U.S. stocks snapped a four-day losing streak yesterday as unexpectedly strong earnings from Nike Inc. and International Paper Co. boosted investor confidence that second-quarter profits will come in on target.

The Dow Jones industrial average rose 31.03 to 5,581.86 after a four-day skid during which it lost 179.15 points.

Among broad market indexes, the Nasdaq composite index, filled with computer and semiconductor issues, rose 4.77 to 1,153.59, and the Standard & Poor's 500 Index gained 2.21 to 654.75, erasing part of Monday's 4.90-point slide.

The Russell 2,000 index of small capitalization stocks fell 0.24 to 336.44; the Wilshire 5,000 index rose 21.04 to 6,460.42; the American Stock Exchange market value index fell 2.24 to 566.67; and the S&P 400 midcap index rose 1.39 to 231.05.

Yesterday's most active stocks in U.S. composite trading were Macromedia Inc., Cisco Systems, LSI Logic, Intel and Sun Microsystems Inc.

Some 1,357 stocks rose and 1,039 rose on the New York Stock Exchange. About 379 million shares traded, below the three-month daily average of 399 million shares.

Nike's stock closed at $108.75, up $4.50, after surging to a record $110.50. The world's largest maker of athletic shoes said fiscal fourth-quarter net income rose 38 percent to $1.06 a share, above the 99 cents analysts had expected.

The S&P paper stock index climbed 21.04 to 1,040.99. International Paper climbed $1.625 to $39.125 after the company's second-quarter profit of 33 cents a share exceeded analysts' estimates by 8 cents a share and its chairman said the company continued to see improved demand for its products.

Georgia-Pacific Corp. gained $2 to $72.125; Union Camp Corp. jumped 62.5 cents to $49.75; and Willamette Industries Inc. rose $1.75 to $60.25.

Software and computer shares gained for a second day amid optimism that those companies will report the biggest second-quarter earnings gains. America Online Inc. rose $2 to $40; Xilinx Inc. gained 12.5 cents to $31; Intel Corp. rose 37.5 RTC cents to $73.375; Cisco Systems climbed 62.5 cents to $57.50; and IBM rose 62.5 cents to $99.

Hewlett-Packard Co. fell $4 to $87.125 after it cut prices of its OmniBook 5500 notebook line by 17 percent just two months after the product began shipping because of competition in the portable computer market.

Semiconductor shares fell after Soundview Financial Corp. analyst Rick Whittington cut earnings estimates for three chip makers and two chip making-equipment companies, saying "1996 is a year of no growth for the world's semiconductor industry."

LSI Logic Corp. slid $2 to $21.50; Texas Instruments Inc. dropped 50 cents to $49.25; and VLSI Technology Inc. fell 25 cents to $12.625.

Addvantage Media Group Inc.'s shares tumbled $4.375 to $3. The company said Wal-Mart Stores Inc. may renegotiate the company's contract to provide calculators in shopping carts at some Wal-Mart stores. Wal-Mart rose 25 cents to $24.25.

Gains in the bond market helped stocks regain ground. The yield on the benchmark 30-year Treasury bond, which moves in the opposite direction of its price, fell to 7.13 percent from 7.18 percent Monday, as demand at an auction of Treasury notes exceeded expectations.

Among consumer product shares that advanced, Procter & Gamble Co. climbed 75 cents to $88.25; Colgate-Palmolive Co. rose 12.5 cents to $82.625; Clorox Co. jumped $1.50 to $90; and Coke rose 12.5 cents to $47.50.

Macromedia fell 87.5 cents to $15.375. The computer animation software developer said it expects fiscal first-quarter earnings of 18 cents a share, compared with the year-ago period's 13 cents. Analysts expected the company to earn 19 cents a share.

Bank of New York Co. gained $1.25 to $50.375. The bank holding company declared a 2-for-1 common stock split, which will take effect after it pays a simultaneously declared quarterly cash dividend of 44 cents a share.

Shares of Dialogic Corp. tumbled $18 to $28.75. The computer hardware and software company said it expects second-quarter earnings of 24 cents to 28 cents a share, less than the 25 cents it earned in the year-ago quarter and less than the 34 cents that analysts expected.

Boston Scientific Corp. shares jumped $3.25 to $43.125. The medical devices company said second-quarter revenue rose 28.5 percent to $357 million from $278 million a year ago.

Cascade Communications Corp. jumped $2.625 to $68.50. The maker of telecommunications switches said it was awarded a multimillion-dollar contract by Aston Communications.

Pub Date: 7/10/96

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