NEW YORK -- U.S. stocks set records yesterday for a fourth day as investors speculated that demand for shares of market leaders such as Exxon Corp. will grow as prospects for corporate earnings brighten.
Johnson & Johnson, Merck & Co., American International Group Inc. and DuPont Co. -- all leaders in their industries -- rose amid a favorable backdrop of meager inflation and stable interest rates.
"If corporate profits continue to expand at above-average rates and inflation stays low, all systems are go," said Charles Henderson, chief investment officer at Chicago Trust Co., which oversees $7 billion. "There's no reason the market won't continue going up unless there's a recession, and there's no sign of one."
The Dow Jones industrial average climbed 36.56 to an all-time high of 7,575.83. The average has risen more than 1,100 points this year and is more than 300 points above last week's level.
Computer shares recovered late in the session after slumping most of the day on concern that orders for PCs will falter during the summer months. Microsoft Corp. gained $2.1875 to $127, Intel Corp. rose $2.3125 to $147.50, and Oracle Corp. advanced $1.0625 to $48.6875. Other bellwether technology companies fell, including Cisco Systems Inc., down $1.3125 to $63.6875, and Xilinx Inc. dropped $1.8125 to $45.25.
"This is the time of the year where you tend to see some weakness in technology stocks," said James Solloway, co-president of Argus Research Corp. "What's exacerbating the situation this time around are the signs that there is some slowdown in demand and Europe continues to be a major problem."
Computer chip stocks have been unable to eclipse their highs since Intel Corp. told investors on May 30 that second-quarter results would fall below expectations. Intel Corp., even with yesterday's gain, has dropped 10 percent in the past two weeks.
"Intel's warning is lodged in the back of everyone's mind," said George Jennison, managing director of Nasdaq stock trading at Wheat First Butcher Singer. "The weakness in tech stocks probably worries me more than anything."
The Standard & Poor's 500 Index rose 4.30 to 869.57, its 24th record this year. The Nasdaq composite index rose 6.16 to 1,407.85, short of its all-time high of 1,412.04, set Monday.
Among other indexes, the Russell 2,000 index of small capitalization stocks rose .31 to 387.62; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, climbed 32.38 to 8,227.14; the American Stock Exchange composite index added 1.56 to 622.67; and the S&P midcap index edged up .46 to 283.10. All except the Russell set records.
The biggest gainer in U.S. trading was Numar Corp., which surged $16.1875 to $36.9375. Halliburton Co. offered to acquire bTC the market of oil and natural gas-bearing rock-detection devices in a stock swap valued at about $355 million, or $39 a share. Halliburton fell $1.75 to $79.125.
Exxon rose $1 to a record $62, DuPont jumped $2.75 to $113.875, and American International Group gained $1.75 to an all-time high of $143.50. Investors said those companies are especially well situated to take advantage of growing overseas demand for their services and products.
"Not long ago, Communism kept half the world blocked to these companies," Brody said. "Some of these companies are now seeing their fastest growth not in the U.S., but overseas."
Financial issues such as Travelers Group Inc., Merrill Lynch & Co. and American Express Co. rose as bond yields hovered near three-month lows, improving the outlook for the companies' second- quarter profits.
The yield on the 30-year government bond was off 0.01 at 6.83 percent. Investors were optimistic that May's retail sales and inflation reports won't give the Federal Reserve enough reason to raise interest rates next month.
Pub Date: 6/12/97