Stocks rise as computers rebound Dow industrials jump 41 points, ending 4-session slump

March 04, 1997|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose yesterday for the first time in four sessions as Intel Corp. led a rebound in computer-related shares.

Intel and other semiconductor stocks, which had lagged since setting records last month, climbed on signs that prices for computer chips may have hit bottom.

The favorable prospects for chip stocks contrasted with those of AT&T Corp., which tumbled after the company warned that pushing into new markets and defending its long-distance franchise would hurt 1997 profit.

The Dow Jones industrial average rose 41.18 points to 6,918.92, after being down 49.64 earlier. The 30-stock average, which set a record of 7,067.46 Feb. 18, was led higher by DuPont Co. after the company's board approved a stock split.

The Standard & Poor's 500 index rose 4.49 to 795.31, stemming a three-day drop in which it fell 21.21, or 2.6 percent. The Nasdaq composite index climbed 2.18 to 1,311.18, its first gain in four sessions.

Among broad U.S. stock indexes, the Russell 2,000 index of small capitalization stocks rose 0.44 to 360.49; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, gained 32.1 to 7591.52; the American Stock Exchange composite index added 0.58 to 594.82; and the S&P 400 mid-cap index dropped 0.17 to 262.19.

About 1,286 stocks rose and 1,226 shares fell on the New York Stock Exchange, where 432.7 million shares changed hands. The three-month daily average is 489.1 million shares.

The Philadelphia semiconductor index climbed 4.81 to 277.74. Major Japanese chip makers, such as Toshiba Corp., raised prices on some types of computer chips last month, the Nihon Keizai newspaper reported over the weekend.

The most active stocks in U.S. trading were AT&T, Cisco Systems Corp., 3Com Corp., Intel and U.S. Robotics Corp.

Intel benefited from optimism that computer chip prices may be on the verge of a recovery.

If a rebound occurs, profits for companies like Intel, Texas Instruments Inc., Novellus Systems Inc. and Lattice Semiconductor Corp. may exceed expectations this year.

Intel, which slid from a high of $164.75 Feb. 4, rose $4 to $145.875. Texas Instruments rose $2.875 to $80; Novellus Systems rallied $4 to $85.75; and National Semiconductor Corp. rose $1 to $27.25.

"There's a lot of skittish money driving those stocks, and expectations change quickly depending on which way the wind is blowing," said Vernon Winters, chief investment officer at Mellon Private Asset Management, which manages $30 billion.

AT&T shares fell $3 to $36.875 and are down 13 percent in the past year. The long-distance company warned that its first-quarter earnings per share could lag forecasts.

Coca-Cola Co. fell 62.5 cents to $60.375. The beverage company's stock, which has rallied almost 50 percent in the last year, is susceptible to a pullback, especially if competition increases, Barron's reported.

Conrail Inc. rallied $7.125 to $111.625 amid speculation that CSX Corp. might be near an agreement to buy Conrail for $10.5 billion, or $115 a share. CSX gained $2.875 to $49.

DuPont surged $4.125 to $111.375. The chemical and plastics maker's board approved a 2-for-1 stock split that will be distributed June 12 to stockholders of record on May 15.

Summit Medical Systems Inc. fell 87.5 cents to $3.875 after the provider of information services for health-care providers said it had overstated revenue for the past three years and its chief financial officer quit three days after joining the company as a result of his discovering the problem.

BHC Financial Inc. rallied $11.875 to $31.875 after Fiserv Inc. said it agreed to acquire the processor of securities trades for about $212 million, or $33.50 a share, in stock. Fiserv rose $3.875 to $36.625.

Applied Magnetics Corp. rallied $4.625 to $43.125 after Read-Rite Corp. said its board unanimously rejected a $1.7 billion hostile bid from the maker of heads that read data tape. Read-Rite rose 6 1/4 cents to $30.75.

VocalTec Ltd. rallied $2.25 to $8.75 after Motorola Inc. signed a licensing and distribution agreement for VocalTec's Internet telephone software technology.

Pub Date: 3/04/97

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