Stocks sail through 6,300 on Dow Computer shares lead the way

bank stocks rally

November 15, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK -- U.S. stocks rose to records again yesterday, sending the Dow Jones industrial average past 6,300 as consumer price and retail reports bolstered investors' perception a low-inflation economy. Computer shares led the advance.

The Dow rose 38.76 to an all-time high of 6,313.00, led by Philip Morris Cos., International Business Machines Corp. and AlliedSignal Inc. It was the Dow's seventh consecutive record and its first close above 6,300.

Stocks benefited from a drop in bond yields to eight-month lows after a smaller-than-expected 0.2 percent increase in October retail sales cast doubt that the holidays will bring a rebound in the economy.

In the broader market, the Standard & Poor's 500 index rose 4.75 to 735.88, its 34th record of the year. The Nasdaq composite index jumped 9.64 to a record 1,270.36, boosted by Microsoft Corp. and Oracle Corp.

The Russell 2,000 index of small capitalization stocks rose 1.15 to 347.26; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock markets, rose 38.09 to 7,121.19; the American Stock Exchange market value index gained 1.05 to 585.36; and the S&P 400 mid-cap index rose 1.67 to 252.64.

Some 480 million shares changed hands on the New York Stock Exchange, with 1,496 issues advancing, while 990 fell. Volume exceeded the NYSE's three-month daily average of 398 million shares.

Computer-related shares led the rally amid optimism that earnings and growth will be better than some are expecting. The Morgan Stanley high tech index rose 7.87, or 2.1 percent, to 381.37, a record.

Microsoft Corp. surged $4.625 to a record $149.625, IBM gained $2.125 to $136.875; Advanced Micro Devices Inc. jumped $3.125 to $24.75 and Oracle jumped 1.875 to 47.375.

Applied Materials rose $1.625 to $32.

Digital Equipment Corp. rose $2 to $33.25 after the computer company's chairman said he believes the company can exceed analysts' earnings estimates for the fiscal year ending in June.

Bank shares rallied, spurred by falling bond yields after the economic reports. Citicorp rose $2.125 to an all-time high of $104.125; BankAmerica Corp. rose $2.75 to $96; Chase Manhattan Corp. gained $2 to $88.75; and First Chicago NBD Corp. rose $1.25 to $55.125.

The benchmark 30-year Treasury bond's yield dropped to 6.42 percent from 6.45 percent, its lowest close since March 5.

Shares and options of GTE Corp., the biggest local phone company in the United States, soared amid speculation that the company could announce a merger or alliance in coming days. Traders said AT&T Corp. could be a possible partner or buyer.

GTE shares rose $1 to $43.75 in trading of 1.69 million shares, beating its three-month average daily volume of 1.47 million.

Lands' End Inc. shares rose $2.25 to $24.875 after the retailer said third-quarter earnings rose to 19 cents a share from 5 cents a year earlier.

Boston Technology Inc. shares rose 87.5 cents to $18.375 after the maker of voice-processing systems reported third-quarter earnings of 15 cents a share, above the average forecast of 13 cents.

Veterinary Centers of America fell 93.75 cents to $9.4375 and was the most active stock on U.S. exchanges after reporting earnings of 5 cents a share, far below Wall Street expectations of 16 cents.

Nokia Oy led an advance in cellular phone shares. The Finnish phone maker's American depositary receipts soared $7 to $58 after the company said third-quarter pretax profit rose 14 percent. Motorola Inc., which makes both cell phones and semiconductors, gained $2.75 to $54.625.

Starbucks Corp. rose 2.50 to 34.375 after the coffee and coffee shop retailer said its fiscal fourth-quarter net income rose to 16 cents a share from 7 cents in the year-earlier period.

Pub Date: 11/15/96

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