Gas stocks fuel rally Dow gains 26 points

Energy companies attract attention, but trading lags behind average volume


NEW YORK -- U.S. stocks rallied yesterday on a surge in natural gas stocks and a pair of computer-guided "buy" orders.

Gas stocks surged after Houston Industries Inc. agreed to buy NorAm Energy Corp., a natural gas company, for $3.8 billion in stock, cash and debt.

The Dow Jones industrial average rose 23.67 to 5,704.98, boosted most by J. P. Morgan & Co., Merck & Co. and Walt Disney Co.

The Standard & Poor's 500 index rose 3.67 to 665.77 after falling 3.15 early yesterday. The Nasdaq composite index rose 1 to 1,138.27, recovering from a 6.98-point loss. Advancing issues outnumbered decliners by 6 to 5 on the New York Stock Exchange.

The Russell 2,000 index of small capitalization stocks slid 0.07 to 327.37; the Wilshire 5,000 index, made up of stocks on the New York, American and Nasdaq exchanges, rose 15.5 to 6,489.45; the American Stock Exchange market value index increased 1.72 to 552.52; and the S&P midcap index gained .87 to 229.21.

Trading was sluggish as just 312.2 million shares changed hands on the Big Board, the fifth slowest full day this year, and far beneath this year's average of 410 million.

On news of Houston Industries' purchase of NorAm and Delmarva Power & Light Co.'s agreement to merge with Atlantic Energy Inc., natural gas stocks, which had climbed since Enron Corp. agreed to buy Portland General Corp. July 22, were the day's biggest gainers in the S&P 500.

Williams Cos. and PanEnergy Corp. rallied after a report that Cinergy Corp., the electric utility in Cincinnati, was holding separate merger talks with the two companies.

Williams Cos. jumped $1.625 to $49.75, PanEnergy added 75 cents to $33.625 and Columbia Gas System leaped $2.125 to $56.75.

Investors "are getting some acquisitions and consolidations" in the utility area, Cremonie said. "The energy market looks better," with crude oil prices jumping 65 cents a barrel yesterday to $22.22, the most since mid-July, Cremonie said.

Consumer growth companies that expand their earnings whether the economy is growing or shrinking registered big gains.

Among drugmakers, Merck climbed $1.875 to $69.375; Pfizer Inc. climbed $2.125 to $73.875; Johnson & Johnson rose $1.375 to $52.625; and Bristol-Myers Squibb Co. gained $1.375 to $89.875.

Medtronic Inc., a medical supplier of pacemakers and heart valves, jumped $1.875 to $55.

Thermo Cardiosystems Inc. spurted $1.25 to 31.375. The maker of medical supplies approved the repurchase of $10 million of stock.

First Brands Inc., a former Union Carbide Corp. unit that makes Glad trash bags, slumped $2.625 to $22.375. Rubbermaid Inc., up 12.5 cents at $28.375, said it is getting into the trash-bag business.

Spine-Tech Inc. skidded $3.14 to $19.875. Hambrecht & Quist downgraded the stock to "buy" from "strong buy."

Pub Date: 8/13/96

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