Stocks rise on strong economic outlook Dow climbs 17 points to within 7 points of highest close ever

September 13, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK -- U.S. stocks rose yesterday as a government report showed scant signs of inflation amid surprisingly strong economic growth and corporate profits.

The 30-stock Dow Jones industrial average ended the day up 17.02 to 5,771.94, within 7 points of its best finish ever. During the session, the average neared its all-time intraday high of 5,796.10 when it rose more than 39 points to 5,794.13. Walt Disney Co. and International Paper Co. led the gains.

Broader indexes remained short of their records. The S&P 500 index gained 3.88 to 671.16, 1.1 percent short of its closing top. The Nasdaq composite index climbed 11.86 to 1,165.81, some 6.7 percent below its acme.

Advancers outpaced decliners on the New York Stock Exchange by a margin of about 14 to 9. Trading was little changed from Wednesday, with about 398.8 million shares changing hands on the NYSE.

The Russell 2,000 index of smaller shares climbed 1.44 to 338.14; the Wilshire 5000 index -- a gauge of stocks listed on the NYSE, Nasdaq stock market and American Stock Exchange -- gained 38.23 to 6,586.36; the American Stock Exchange market value index rose 0.60 to 566.66; and the S&P midcap index increased 1.44 to 235.30.

Intel Corp., the No. 1 chip maker, rose 37.5 cents yesterday to FTC record $85.375, and Microsoft Corp., writer of Windows software that runs most new computers, climbed $3.50 to $128.625.

Among other computer industry shares, networker Cisco Systems Inc. climbed $1.8125 to $56.1875. Computer-network switch maker Fore Systems Inc. rose 87.5 cents to $35.875. Personal computer and server box builder Dell Computer Corp. rose 37.5 cents to $73.875.

Micron Technology Inc. rose $2 to $23.50, and was the fourth most actively traded stock of the day.

Shares of Xerox Corp. fell $3.25 to $54.625 after the photo-imaging and financial company agreed to call off the $2.7 billion sale of its Talegen Holdings Inc. insurance unit to Kohlberg, Kravis, Roberts & Co.

Among the Dow industrials, Disney climbed $1.875 to $60.50; International Paper Co. rose 87.5 cents to $41.875; and Minnesota Mining and Manufacturing Co. rose 87.5 cents to $69.

Among financial shares, American Express Co. rose 62.5 cents to $44.125 and National City Corp. rose 75 cents to $40.25, capitalizing on falling bond yields.

The yield on the benchmark 30-year Treasury bond fell 4 basis points to 7.07 percent.

Rockwell International Corp., which specializes in modem chips, rose 50 cents to $54.625 a couple of days after it said it is working to speed up by two-thirds computer communication through regular phone lines.

Boca Research Inc., up $2.25 to $12, said after the close of trading Wednesday that it would build modems based on the chip. U.S. Robotics Corp. also is expected to ship modems based on the technology, analysts said. U.S. Robotics, the largest modem maker, added $4.875 to $61.75, and was the most actively traded stock after Duracell.

Motorola Inc. fell $1.25 to $48, a day after it said profits for the third quarter wouldn't match analysts estimates. Goldman, Sachs & Co. removed the maker of cellular telephones and semiconductors from its "recommended list."

United HealthCare Corp. and ITT Hartford Corp. each rose for a second day after they were selected to negotiate with the American Association of Retired Persons to manage a $3.5 billion health insurance services contract. Metropolitan Life Insurance Co. was also chosen.

United HealthCare rose $1.125 to $41.25, and ITT Hartford rose $3 to $57.125.

Network General Corp. shares surged $2.375 to $20 amid optimism for a new network management program and possible marketing partnerships that could boost profits. The company plans to demonstrate the software next week at a conference in Atlanta.

Pub Date: 9/13/96

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