Stocks climb amid news of job cuts Dow industrials up 36 points, to 7,922

'triple witch' today

Wall Street

September 19, 1997|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose yesterday as Whirlpool Corp. and Tektronix Inc. said they would slash jobs, raising confidence that companies will do whatever it takes to boost profits.

Whirlpool, which said it would cut 4,700 jobs, and Tektronix, which said it would eliminate 250, both jumped more than 10 percent and were the biggest gainers in the Standard & Poor's 500 index.

They were among a host of companies this week that announced unit sales, spinoffs or share buybacks aimed at pleasing investors.

"It's the most exceptional period in U.S. capital markets since the 1920s," said F. Van Kasper, president of his own investment firm with more than $2 billion in assets.

"If you're running a corporation today and you're not getting recognition from the capital markets, you're going to do whatever you can to get with the flow."

Whirlpool rose $8.0625, or 14 percent, to $64.875. In the prior 18 months, Whirlpool's shares had fallen 7.6 percent, while the benchmark S&P 500 index was climbing 44 percent. Yesterday, the S&P 500 rose 4.29, or 0.5 percent, to 947.29.

The Dow Jones industrial average closed 36.28 points higher at 7,922.72, after giving up 98 points of an earlier 134-point surge that sent it above 8,000 for the first time in five weeks. The backup coincided with a faltering rally in bonds. The Nasdaq composite index rose 3.55 to a record 1670.02.

About 1,717 shares rose while 1,173 fell on the New York Stock Exchange. About 576 million shares changed hands, about 8 percent above the recent average, a day before the expiration of stock options, index futures and options on futures, also known as the "triple witch."

Companies' efforts to trim their work forces and shed units, coupled with falling interest rates, helped kick off this decade's bull market. Now, investors are demanding that companies match those big gains in profits and shares, keeping up the pressure on corporate chiefs.

Whirlpool also said it would sell its appliance-financing unit to Transamerica Corp. for $1.35 billion.

Tektronix, a maker of color printing and measurement equipment, said it would cut 250 jobs in its unprofitable video unit. It rose $5 to $67.375.

Georgia-Pacific announced that it will create a separate operating structure for its timber group and said it expects earnings for the third quarter and for 1997 to exceed analysts' forecasts. Georgia-Pacific shares jumped $3.125 to $101.75, leading a rally in paper stocks. Champion International Corp. rose $2.375 to $65.1875. Louisiana-Pacific Corp. rose $1.4375 to $25.0625.

Dow Jones & Co. jumped $2.375 to $48.25 after the New York Post reported that the company may sell or spin off its financial information services unit.

"Managements are really trying to find ways to increase shareholder value," said Guy Truicko, a money manager at Unity Management, which oversees $1 billion.

A backdrop of steady economic growth, scant inflation, and stable bond yields provided support for stocks.

The yield on the benchmark 30-year Treasury bond was little changed at 6.40 percent, as a series of reports showed the economy is growing with little inflation. The yield fell 29 basis points in the past week. Lower interest rates make borrowing cheaper and help profits expand.

"The correction is being muted or stalled by the action of the bond market," said A. C. Moore, chief market strategist at Principal Financial Securities, a money-management firm.

The Dow is still 4.1 percent below its record close on Aug. 6, as warnings of weak performance from members Coca-Cola Co. and Eastman Kodak Co. have dragged down multinational shares.

The Russell 2,000 index of small capitalization stocks rose 0.35 to 446.50 yesterday; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, spurted 40.45 to 9,148.29; and the American Stock Exchange composite index climbed 3.80 to 686.80.

Pub Date: 9/19/97

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