Stocks lifted by economic outlook Dow industrials rise 56 points, to 7,000

index up 1.8% on the week

March 08, 1997|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose yesterday on signs that the economy is growing with little inflation, boosting chances for improving earnings and stable corporate borrowing costs. Citicorp and other financial shares paced the gain.

Stocks responded to a Labor Department report showing that the economy added an unexpectedly large number of jobs last month while wages rose a smaller-than-forecast 3 cents an hour. The Federal Reserve may put off raising interest rates at a March 25 meeting because the economy isn't overheating, analysts said.

The Dow Jones industrial average rose 56.19 to 7,000.89, its first close above 7,000 in more than a week. The 30-stock average, which set a record of 7,067.46 Feb. 18, rose 123 points, or 1.8 percent, for the week.

Yesterday, it was led higher by Eastman Kodak Co., Philip Morris Cos., Boeing Co. and J. P. Morgan & Co.

Philip Morris rallied $2.75 to $136 after competitor RJR Nabisco Holdings Corp. said it will raise prices on Camel and Winston cigarettes by an average of 4.7 percent, or 4 cents a pack. RJR's stock climbed 25 cents to $36.875.

The Standard & Poor's 500 index rose 6.41 to 804.97, its third gain in five days.

The Nasdaq composite index fell 3.63 to 1,311.80 as shares of computer networking companies dropped. Cisco Systems Inc. slid $3.25 to $51.375 and 3Com Corp. fell 1.4375 to 33.8125.

Among broad U.S. stock indexes, the Russell 2,000 index of small capitalization stocks rose 1.66 to 365.46; the Wilshire 5,000 rallied 47.44 to 7,687.12; the American Stock Exchange composite index climbed 1.75 to 602.06; and the S&P 400 mid-cap index inched up 0.64 to 266.42.

Financial shares rose as the yield on the benchmark 30-year Treasury bond dropped to 6.81 percent from 6.88 percent. Chase Manhattan Corp. rose $3.75 to $106.50; Citicorp gained $3.25 to $125.75; BankAmerica Corp. leaped $3.25 at $122; and Merrill Lynch & Co. rose $1.50 to $98.625.

About two stocks rose for every one that fell on the New York Stock Exchange, where some 506 million shares traded.

AMR Corp. rallied $1.125 to $83.50 as the parent of American Airlines said the carrier and its pilots agreed to let a panel appointed last month by President Clinton oversee a new round of contract talks, the first sign of movement in the stalled negotiations in a month.

Ford Motor Co. and General Motors Corp. gained after they said they aren't planning to match a sweetened dealer incentive program unveiled by Chrysler Corp. GM rose 50 cents to $56.625; Ford gained 37.5 cents to $32.25; and Chrysler rose 12.5 cents to $31.875.

Texas Instruments Inc. rallied a day after predicting that semiconductor sales would rise by 10 percent. The Dallas-based company's stock rose $3.375 to $83.875.

Other semiconductor shares that gained included Novellus Systems Inc., up 62.5 cents at $82.875; Advanced Micro Devices Inc., which rose $1.75 to $39.50; and Motorola Inc., up 62 1/2 cents to $59.375.

Among losers, Atmel Corp. slumped $4.75 to $26.75 after the semiconductor company said it expects first-quarter revenue to fall perhaps 10 percent below the fourth quarter's $281 million.

Pub Date: 3/08/97

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