NEW YORK -- U.S. stocks rose yesterday as a rally in bonds lifted bank shares and the plunging dollar boosted exporters.
The Dow Jones industrial average gained 32.91 to 7,169.53 and was up 1.4 percent for the week.
Caterpillar Inc. led the Dow higher. NationsBank Corp. boosted regional banks, the top-performing industry group in the Standard & Poor's 500 index.
A declining dollar "would help the earnings of a company like Caterpillar that does a lot of exporting, particularly to Japan," said Robert Brody, who runs the American Growth fund with $100 million in assets.
Banks went back and forth with bonds, veering between optimism that the U.S. central banks won't raise interest rates this month and concern that overseas investors might want to sell U.S. assets because of the weak dollar.
Optimism for stable interest rates prevailed and the yield on the benchmark 30-year Treasury bond fell 4 basis points to 6.89 percent.
As yields fall, more companies are inclined to borrow, generating greater fees for banks.
The Standard & Poor's 500 index jumped 4.50 to 824.76 to finish a 1.5-percent, one-week gain. Coca-Cola Co., which makes about three-quarters of its sales outside the United States, rose 87 1/2 cents to $65.50 to lead the S&P's gainers.
The Nasdaq composite index rose 4.22 to 1,335.05 and was up 2.3 percent for the week. Investors expect the Nasdaq composite, with its group of fast-growing computer-related growth companies such as Cisco Systems Inc., to lead the markets higher in coming days.
On the broader market, the Russell 2,000 index of small capitalization stocks gained 1.32 to 361.42; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, added 35.70 to 7,781.11; the American Stock Exchange composite index climbed 2.83 to 573.78; and the S&P mid-cap index rose 0.51 to 267.76.
Advancers led decliners on the New York Stock Exchange by about five to three. The Dow industrials swung in a 100-point range on the day, rising 59 points early and sinking about 40 points around noon before recovering. Trading of 456.6 million shares on the New York Stock Exchange trailed average daily volume over the last three months of about 492 million shares.
Shares of Caterpillar, which makes about half its sales outside the United States, rose $2.375 to $96.625.
NationsBank climbed $1 to $60.25; First Union Corp. rose $1.50 to $85.625; Citicorp rose $2 to $117; and Chase Manhattan Corp. gained $1.875 to $97.75.
Cephalon Inc. shares plunged $7 to $13 after a report that its drug for treating Lou Gehrig's disease failed to win the backing of a Food & Drug Administration advisory panel. Chiron Corp., a research partner, fell 87 1/2 cents to $19.125.
Premier Laser Systems Inc., a maker dental lasers that remove tooth decay and prepare teeth for fillings, jumped for a third day after the FDA approved its novel treatment for use. Premier's shares rose $3 to $14, and were the second most active in U.S. trading.
Cisco, the most active stock, rose 25 cents to $61.625.
McDonald's slid $1.125 to $53.125 after the world's largest restaurant chain said a new low-priced menu doubled sales of its Big Mac, though only "incremental" profit gains were expected.
Chrysler Corp. workers ended a four-week walkout at a Detroit engine plant, boosting shares 75 cents to $31.25. Ford Motor Co. rose $1 to $36.625, and General Motors Corp. rose $1.125 to $57.875.
American depositary receipts of LucasVarity PLC, a British car parts maker, rose 75 cents to $31.625 after Goldman, Sachs & Co. added the stock to its "Recommend List."
Pub Date: 5/10/97