U.S. stocks rise, led by retailers, airlines Dow jumps 52.90, marking its biggest climb in five weeks

September 07, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK -- U.S. stocks jumped yesterday, led by retailers and airlines, as fresh signs of an expanding economy increased their attractiveness as investments.

The Dow Jones industrial average jumped 52.90 to 5,659.86, its biggest climb in five weeks, led by International Business Machines Corp. and Caterpillar Inc. For the week, the average gained 0.78 percent.

Stocks benefited from a rally in bonds after the Labor Department said the economy added 250,000 jobs in August, roughly in line with analysts' forecasts in a Bloomberg Business News poll, plunging the unemployment rate to 5.1 percent, the lowest rate in more than seven years.

The yield on the 30-year Treasury bond fell to 7.11 percent, after initially soaring as high as 7.22 percent.

Trading fell to about 349 million shares yesterday from about 361 million. Advancing shares outnumbered those that declined, 1,652 to 705.

Retailers Gap Inc., up $1.625 at $30.625; Limited Inc., up 12.5 cents at $17.875; and TJX Cos., up 75 cents at $33, were among those leading the market higher. Dow member Sears added $1.375 to $44.50. Thursday, reports of mixed retail sales last month prompted an industry-wide slump.

Toolmaker Cincinnati Milacron Inc. rose $1 to $20.875. Caterpillar rose $1.50 to $71.75.

AMR Corp., parent of American Airlines, jumped $1.375 to $78.125. Southwest Airlines Co. leaped $1.25 to $22.75 and Continental Airlines Inc. Class B shares grew 87.5 cents to $22.125.

Georgia Pacific jumped $1 to $74.875 and LTV gained 37.5 cents to $13.

In the broader market, the Standard & Poor's 500 index rose 6.24 to 655.68. For the week, it gained 0.6 percent.

DTC Wells Fargo & Co. rose $4.875 to $253.25; First Union Corp. added $1 to $63.875; and Banc One Corp. climbed 75 cents to $38.75.

The Nasdaq composite index rose 13.73 to 1,139.39, its best showing in two weeks.

Komag Inc. became the second disk-drive part maker in as many days to lower its profit outlook for the current quarter. The company said it expects to earn 30 cents to 50 cents in the third quarter, below analysts' average estimate of 68 cents, according to Zacks Investment Research.

Komag shares fell $2.50 early in the day, then rebounded to $19.375, down 87.5 cents. Thursday, Hutchinson Technology Inc. said it was breaking even so far this quarter. It rose 62.5 cents to $34.625 yesterday, after falling $5.15625.

Industry leader Seagate Technology Inc., in an attempt to shore up its flagging shares, announced a 7 million-share buyback late yesterday. It rose 75 cents to $46.125.

Wyle Electronics, a distributor of semiconductors and electronics, said its third-quarter earnings would fall below the year-earlier quarter and second quarter because of a slowdown in semiconductor orders. It plunged $3.25 to $30.125.

Competitor Kent Electronics Corp., a contract supplier and distributor, also felt investors' displeasure after it said profits would about match year-ago levels. It fell $4.25 to $17.125.

Canandaigua Wine Co. fell $5 to $17, a three-year low, after it halved its fiscal 1997 earnings estimate to between $1.10 and $1.40 a share.

A warning of a second-quarter loss roughed up Workgroup Technology Corp., a data-management software publisher, whose shares sank $8.625 to $6.375.

Emisphere Technologies Inc. surged $2.6875 to $14.125 after Genesis Merchant Group rated the company a new "buy." Thursday, the drug delivery company announced, along with Elan Corp., the successful trial of oral delivery of the protein heparin.

Pub Date: 9/07/96

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