Stocks rise on signal from Fed Dow industrials add 12 points, to 7,835

Nasdaq hits record

Wall Street

September 09, 1997|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks advanced yesterday after Federal Reserve Chairman Alan Greenspan signaled that interest rates probably will remain steady, boosting optimism that corporate profits will rise.

Greenspan said the economy continues to grow without inflation -- unlike previous expansions -- probably because new products such as computers are enhancing productivity.

The Dow Jones industrial average climbed 12.77 to 7,835.18. Chevron Corp. led the gains, rising $2.3125 to $80.6875 after Prudential Securities told investors the stock was a "buy."

The benchmark Standard & Poor's 500 index rose 2.15 to 931.20. The Nasdaq composite index climbed 9.58 to 1,645.35, its second record in a row.

Smaller stocks continued to outperform those in the better-known indexes. The Russell 2,000 index rose 2.95 to 435.99, its eighth straight record. The index was led higher by Input/Output Inc., which makes devices that help oil and gas exploration companies find petroleum deposits.

WorldCom Inc. and American Online Inc. gained after WorldCom said it plans to buy CompuServe Corp. and swap CompuServe's online service for AOL's communications network.

A number of companies got a boost from WorldCom Inc.'s $1.2 billion, or $12.80 a share, buyout of online-service provider CompuServe Corp., except CompuServe, which fell 18.75 cents to $13.3125 as the offer undercut the closing value of CompuServe shares Friday.

AOL jumped $6.125 to $76.0625, as it extended its dominance of the online-access business. WorldCom rose $2.25 to $33.75. H&R Block Inc., which owns 80 percent of CompuServe, fell 68.75 cents to $39.50.

Among other broad market indexes, the American Stock Exchange composite index advanced 3.12 to 670.67; and the S&P 400 mid-cap index gained 1.88 to 323.87. Both were records.

The Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, added 24.89 to 8,969.81.

Advancing shares outnumbered those that declined by 1,777 to 1,080 on the New York Stock Exchange, where trading was below average at 485.8 million shares.

Delta Air Lines Inc. rose $5 to $99.3125. U.S. Airways added $2.75 to $37.75 based on analyst expectations that the company will earn $5.31 a share in 1997.

Cymer Inc. plunged $12.875 to $69.125 on concern that the company won't be able to meet estimates for the third quarter. One of its three top customers rescheduled an order, said Jane Snorek, an equity research director at Oberweis Asset Management.

The maker of semiconductor equipment dragged others in its industry lower, including Applied Materials Inc., which fell $4.0625 to $94.25, and Novellus Systems Inc., which declined $4.4375 to $111.9375.

Western Digital Corp., a maker of disk drives, fell $3.8125 to $43.9375 after cautionary comments from a Bear, Stearns & Co. analyst. Rival Seagate Technology Inc. slid $1.125 to $35.

Paper companies such as International Paper Co. fell after Merrill Lynch & Co. lowered its opinion on the pulp industry on concern that Asian economies will cut back on purchases as growth slows.

International Paper declined 56.25 cents to $53.50; Weyerhaeuser Co. dropped $2 to $55; and Georgia Pacific Corp. fell $1.6875 to $89.4375.

General Signal Corp. dropped $5.8125 to $38.9375 after it said earnings for 1997 would be 35 cents below the average analyst forecast of $2.88 a share.

Bell Microproducts Inc., a semiconductor and computer parts distributor, said it expects third-quarter earnings to be between 6 cents and 12 cents a share, down from 19 cents in the second quarter. Bell fell 12.5 cents to $9.25.

Titan International Inc., a tire and wheel maker, said it sees third- and fourth-quarter earnings below analyst estimates because of spending costs related to releasing new lines. Titan fell 50 cents to $17.50.

Weider Nutrition International Inc., a developer of nutritional supplements, said it expects to earn 7 cents a share for the quarter ended Aug. 31, half the average estimate. It fell $1.875 to $10.50.

Graham-Field Health Products Inc. agreed to buy Fuqua Enterprises Inc., a maker of medical equipment and furnishings, for about $166 million in stock and the assumption of debt. Fuqua rose $5.9375 to $32.3125, and Graham-Field fell 87.5 cents to $17.

Pub Date: 9/09/97

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