Stocks rise, with Dow adding 39 points Investors anticipate slow inflation and more deficit cuts

November 06, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK -- U.S. stocks rose yesterday amid optimism for slow inflation and further deficit cuts after the national elections. Gains in banking, retail and computer-industry shares sent the Standard & Poor's 500 index to an all-time high.

The Dow Jones industrial average rose 39.50 to 6,081.18, paced by AlliedSignal Inc., International Business Machines Corp. and Minnesota Mining & Manufacturing Co. Texaco Inc. fell $3.125 to $94.50, shaving almost 9 points from the Dow average, as investors grew more concerned that a racial scandal could hurt the company's bottom line.

The S&P 500 rose 7.41 to 714.14, its 29th record this year, surpassing its previous high of 710.82 Oct. 18.

Nasdaq's composite index rose 8.59 to 1,229.07, led by U.S. Robotics Corp. after the maker of modems and computer networking hardware said revenue doubled in its fiscal fourth quarter.

The Russell 2,000 index of small capitalization stocks slid .05 to 339.86; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, spurted 59.15 to 6,920.29; the American Stock Exchange market value index jumped 1.86 to 573.62; and the S&P mid-cap index gained 1.66 to 244.22.

Some 492.9 million shares traded on the New York Stock Exchange, with 1,483 issues rising and 954 falling. An average of 404 million shares have traded on the NYSE daily this year.

Bank and other financial service shares advanced. Citicorp rose $1.75 to a record $101.25; BankAmerica Corp. gained $1.75 to $93.25; NationsBank Corp. climbed $1.625 to $95.125; and Bank of New York Co. rose $1.25 to $33.875.

The benchmark 30-year Treasury bond's yield fell 8 basis points to 6.58 percent, its lowest level since April 2.

Consumer shares such as Procter & Gamble Co. continued to outperform shares of more economically sensitive companies such as United Technologies Corp. and International Paper Co. as investors speculated that such stocks will perform relatively better in a slow-growth economy.

P&G gained $1.625 to $102; United Technologies gained 12.5 cents to $130.25; and International Paper fell 25 cents to $42.75.

U.S. Robotics gained $1.50 to $61 after beating analysts' earnings expectations for the fiscal fourth quarter by a penny, and was the most actively traded stock in the United States as 15.7 million shares changed hands. The modem maker said profit from operations almost doubled, putting earnings at 71 cents a share.

Compaq Computer Corp. jumped $4.125 to $70.375 after it was reiterated a "buy" at Bear Stearns & Co. "Our order books are chock full," said Earl Mason, chief financial officer at Houston- based Compaq.

Shares in Apple Computer Inc. jumped $1.0625 to $25.4375 after the company told analysts it expects to make money next year even if revenue doesn't rise. By fiscal 1999, the company said, it expects revenue to rise 20 percent to about $12 billion.

Among other computer industry stocks, Microsoft Corp. jumped $3.50 to an all-time high of $141.50; Intel Corp. gained $3.625 to $114; and Cisco Systems Inc. rose $1.125 to $61.75. All three appeared on a global "top 40" shopping list of stocks from analysts at Morgan Stanley & Co.

Pub Date: 11/06/96

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