Labor cost, productivity reports give stocks a lift Brighter profit outlook brings index records

Dow rises 16.7 points

Wall Street

September 10, 1997|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose after government reports showed unexpectedly strong productivity gains and the smallest labor cost rise in three years, signaling that strong profits are on tap.

Intel Corp. rose $1.8125 to $97.75 and was among the leaders after it introduced a product to link computers that improves efficiency by 30 percent.

The Dow Jones industrial average rose 16.73 points, or 0.2 percent, to 7,851.91; the Standard & Poor's 500 index rose 2.42, or 0.3 percent, to 933.62; and the Nasdaq composite index gained 10.87, or 0.7 percent, to 1,656.22, its third straight record.

Among broad market indexes, the Russell 2,000 index of small capitalization stocks rose 1.76 to 437.75; the American Stock Exchange composite index advanced 0.76 to 671.43; and the S&P 400 midcap index gained 0.79 to 324.66. All were records.

The Wilshire 5,000 index of stocks on the New York, American and Nasdaq stock exchanges added 27.27 to 8,996.08.

Advancing stocks outnumbered those that declined by 1,577 to 1,236 on the New York Stock Exchange, where volume was about average at 502.2 million shares.

Better-than-expected earnings at companies such as Campbell Soup Co. and Samsonite Corp. helped boost the broad market.

Coca-Cola Co. fell 37.5 cents to $58.75 on news that Chairman and Chief Executive Roberto Goizueta was hospitalized with a malignant lung tumor. The company said Goizueta would return to work next week.

McDonald's fell 37.5 cents to $46.375.

Gillette fell 6.25 cents to $80.125. The stock is down 23 percent from mid-July, when the razor maker warned of slowing growth.

Oakley Inc. fell $1.125 to $11.625. The maker of sunglasses said third-quarter earnings will "fall substantially below" analysts' estimates on lower-than-expected sales.

Corning Inc. fell after a report in its hometown newspaper in Corning, N.Y., said the maker of fiber-optic cable used in communications may have overestimated demand by 100 percent. Corning shares slumped $4.50 to $49.

Frederick's of Hollywood Inc. rose $3.375 to $10.25 after Knightsbridge Capital Corp. increased its bid for the company to $7.75 a share, or $67.4 million, from $6.90, or $60 million, matching a similar bid from another suitor.

The Labor Department reported second-quarter productivity rose 2.7 percent, well above the 2.1 percent forecast.

Among technology stocks, Compaq Computer Corp. was unchanged at $68. Sun Microsystems Inc., a maker of high-end computers, fell 6.25 cents to $49.1875.

Networkers rose. 3Com Corp. jumped $3.4375 to $51.50 as investors looked past concern that Intel's new network products would eat into sales. Cisco Systems Inc. gained 12.5 cents to $76. Ascend Communications Inc. rose $2.375 to $42.5625.

Tellabs Inc. was the exception, falling $5.9375 to $56.8125 after the company's chief financial officer told analysts that Tellabs won't beat third-quarter earnings estimates.

Campbell Soup gained $1.3125 to $51.6875 after the company reported better-than-expected earnings in its latest quarter.

Pub Date: 9/10/97

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.