Computer shares are stars of big day An analyst sees more room to climb for technology issues


NEW YORK -- On a day when major indexes set records based on economic news, computer industry shares climbed yesterday as analysts raised their ratings on individual stocks and industry groups.

Soundview Financial Group, known for its prescient analysis of the computer chip industry, said yesterday that "technology" shares could appreciate by 30 percent to 40 percent in the next four to five months.

IBM got its boost from Merrill Lynch & Co., which raised its outlook to "buy" from "accumulate." The No. 1 computer company jumped 5.7 percent for the week.

Top computer chip maker Intel Corp. gained $2.75 to $88.125. Its shares set a record every day this week, rising 8.5 percent. Microsoft Corp. rose $2.375 to a record $131, capping a 6.9 percent rally for the week with a second consecutive new top. Informix Corp., a computer-software maker gained $2 to $26.25.

Dominant modem builder U.S. Robotics grew $3.50 to $65.25. Oracle Corp., the third-largest U.S. software writer, added $4.625 to $42.125 as analysts urged investors to look past lackluster earnings to fast-growth quarters around the corner.

Oracle earnings fell short of expectations by a penny as sales slowed. Net income rose to 17 cents a share from profit from operations of 13 cents a year earlier. Revenue for the quarter ended Aug. 31 rose 36 percent to $1.05 billion.

Oracle shares had fallen 9 percent in the past month. Two analysts upgraded its stock to "buy."

Among financial stocks, Chase Manhattan Corp., tops in total assets among banks, gained $1 to $79.375. Citicorp., the second-largest U.S. bank, rose $2.25 to $88.50. NationsBank Corp. rose 75 cents to $85.625.

Interest-sensitive utilities, whose dividends compete with fixed-income investments, also gained. American Electric Power Corp. rose 75 cents to $41.625; Consolidated Edison Co. of New York gained 50 cents to $28; and Panenergy Corp. jumped 50 cents to $35.25.

Compuserve Corp. rose 50 cents to $14 after its top international manager said European profits were "extremely" high and would result in an overall profit in the second half.

Gillette Co. added another $4.375 to reach $70.375, a record high, a day after it said it would pay more than $7 billion for battery maker Duracell International Inc. Duracell gained $4.296875 to $62.421875.

dTC Red Lion Hotels Inc. rose 25 cents to $29 after Doubletree Corp. agreed to pay $1.2 billion in cash and stock, or $30.11 a share for the chain hotelier. Doubletree fell 6.25 cents to $36.9375.

Solectron Corp., a manufacturing service company, jumped $6.50 to $41 amid enthusiasm for robust fiscal fourth-quarter earnings, due to be reported Monday.

On the broad market, the Russell 2,000 index of smaller shares rose 2.65 to 340.798; the Wilshire 5,000 index -- a gauge of stocks listed on the NYSE, Nasdaq Stock Market and American Stock Exchange -- spurted 84.75 to 6,671.11; the American Stock Exchange market value index rose 3.60 to 570.26; and the S&P mid-cap index climbed 2.47 to 237.77.

Pub Date: 9/14/96

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