Stocks rise on outlook for today's election Dow industrials gain 19 points

GM and drug shares strong

November 05, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK -- U.S. stocks rose yesterday as polls indicated that the presidential and congressional elections are unlikely to bring wild cards that could shake up the market. Drug shares led the gains.

Since Republicans took control of Congress in 1994, offsetting the power of a Democratic presidency, the stock market has set records while interest rates and unemployment have stayed low.

"Investors like the gridlock," said Jeff Erickson, a money manager at Advantus Capital Management with $2 billion in assets.

The Dow Jones industrial average rose 19.75 to 6,041.68, paced by General Motors Corp., which reached a labor accord during the weekend after four months of difficult negotiations.

In the broad market, the Standard & Poor's 500 index rose 2.96 to 706.73. The Nasdaq composite index fell 1.30 to 1,220.48.

The Russell 2,000 index of small capitalization stocks gained 1.39 to 399.19; the American Stock Exchange market value index dropped 0.82 to 571.76; and the S&P mid-cap index rose 0.13 to 242.56.

About 1,326 stocks advanced and 1,046 declined. Trading totaled 391 million shares, above the daily average of 385 million during the last three months.

Telecom shares were mixed after MCI Communications Corp. agreed to be acquired by British Telecommunications PLC. MCI shares closed well below the takeover price amid shareholder concern that the $25.5 billion acquisition will face roadblocks put up by AT&T Corp. and other MCI rivals.

MCI shares rose 50 cents to $30.75, $8.75 below BT's offer, which is valued at $39 a share at yesterday's closing price. BT American depositary receipts rose 6.125 to 61.625.

AT&T dropped 75 cents to $33.75 and Sprint, another MCI long-distance rival, fell $1.625 to $41.875.

Drug stocks rose for only the second time in eight sessions. Pfizer Inc. gained $2.125 to $84; Merck rose $1.375 to $75.375; and Schering-Plough Corp. rose $1.50 to $65.75.

Bristol-Myers jumped $4.125 to $110.50 on optimism about a presentation it will make at an American Heart Association meeting in New Orleans next week on several drugs, including an experimental heart medication.

Among auto makers, General Motors Corp. shares rose $1.625 to $55.625 and Ford Motor Co. gained $1 to $31.50. Chrysler Corp. fell 12.5 cents to $33.375.

The yield on the benchmark 30-year government bond fell 2 basis points to 6.66 percent.

J. C. Penney Co. shares fell $1.875 to $51.125 after the company said it will buy retail drug chain Eckerd Corp. for $3.3 billion in cash, stock and assumed debt, making its Thrift Drug business No. 2 in the United States behind Rite Aid Corp. Eckerd shares jumped $4.40625 to $33.28125.

United Carolina Bancshares Corp. rose $8.50 to $36 after Southern National Corp. said it will buy the bank for $985 million in stock. Southern National fell $1.75 to $33.50.

Foster Wheeler Corp. fell $4.875 to $35.125 after the hazardous-waste management company said it's not likely to meet its 15 percent growth objective in 1997.

Micron Technology Inc. rose $2.875 to $28 after the chip maker was raised to long-term "buy" from long-term "accumulate" by analyst Thomas Kurlak at Merrill Lynch & Co. Micron shares gained $2.875 to $28.

Access Health Inc. shares rose $3 to $36.50 after the health-care company said it expects to sign a contract to serve as many as 3.6 million federal employees.

Checkpoint Systems Inc. shares rose $2.375 to $24.625 after the company said it would install its radio frequency electronic surveillance systems in more than 1,650 American Stores Co. facilities.

Grove Bank shares rose $11.875 to $48.875 after Citizens Financial Group Inc., owned by Royal Bank of Scotland, acquired it for $87 million.

Ralston-Ralston Purina Group shares rose $2.125 to $72 after BT Securities Corp. raised the food processing company to "buy" from "market perform," and raised fiscal 1996 and 1997 earnings estimates.

Sierra Health Services Inc. shares fell $5 to $23.875 after the health-maintenance organization said it agreed to acquire Physician Corp. of America for $509.4 million in a stock-swap.

Physician Corp. of America rose 12 1/2 cents to $10.75.

Pub Date: 11/05/96

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