Stocks climb to another new high Dow industrials rise 14 points, to 6,560

Wall Street

phone stocks are strong

December 28, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK -- U.S. stocks rose yesterday, sending the Dow Jones industrial average to its first record in a month. Telephone stocks paced the advance.

Boosted by lower Treasury bond yields and optimism that both the economy and corporate earnings will keep growing in 1997, the 30-stock Dow industrials climbed 14.23 to 6,560.91, bringing its gain for the full year to 28.2 percent. It was the 44th time this year that the Dow has reached a record, and brought the week's gain to 76.51, or 1.18 percent.

In the broad market, the Standard & Poor's 500 index, representing three-quarters of the value of all U.S. shares, gained 0.97 to 756.79, just below its Nov. 25 peak of 757.03. The advance would have been greater if not for losses in computer shares, as Computer Associates International slid 21 percent.

Advancing stocks outnumbered declining issues on the New York Stock Exchange by 1,559 to 899. Only 253.8 million shares changed hands on the NYSE, making the holiday-shortened week the slowest all year as trading volume reached 1.01 billion shares.

The Russell 2,000 index of small-company shares gained 1.45 to 359.17; the Wilshire 5,000 index rose 17.94 to 7,288.86; the American Stock Exchange market value index lost 0.90 to 581.93; and the S&P mid-cap index gained .95 to 254.75.

The Nasdaq composite index dropped 3.19 to 1,291.38.

Yields on benchmark 30-year Treasury bonds fell to 6.53 percent from 6.58 percent Thursday.

Bell Atlantic Corp. climbed $2.875 to $67.875; SBC Communications Inc. rose $1.50 to $55.125; BellSouth Corp. added $3 to $43.875; Ameritech Corp. gained $2.25 to $62.875; and Nynex Corp. gained $2 to $50.75.

The S&P 500 index is ahead 22.9 percent this year after surging 34.1 percent in 1995, the biggest back-to-back gain since the mid-1950s.

Computer Associates dragged down computer, semiconductor and software stocks after the company said its earnings would fall as much as 17 percent short of expectations. The stock, the most active in U.S. trading, fell $13 to $48.75 as 17.9 million shares changed hands.

ZTC Intel Corp. fell $1.25 to $135.375; Microsoft Corp. dropped $1.25 to $84.25; and Micron Electronics Inc. fell $1.125 to $19.375.

Analysts said computer shares are vulnerable to declines simply because of their huge gains of the past two years. The Morgan Stanley High-technology Index, for instance, is still ahead 23.4 percent this year after jumping 50.9 percent in 1995.

Software publishers that are working to bring computers into the 21st century -- by developing software that lets computers recognize the difference between the year 1900 and 2000 -- soared.

Zitel Corp. shares leaped $9.125, or 18 percent, to $61.25, setting another record in active trading of 5.1 million shares; TSR Inc. vaulted $10.50 to $37.50; Acceler8 Technology Corp. rose $1.125 to $21.50; Computer Horizons Corp. gained $1 to $35.75; and Data Dimensions Inc. jumped $4.75 to $37.75.

Pub Date: 12/28/96

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