Lower rates send Dow up 12.03, to 8,027 4th gain in 5 days

broad market indexes set records

October 03, 1997|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose yesterday for the fourth time in five days as lower interest rates spurred gains in BankAmerica Corp. and other financial shares. A dour profit forecast from insurer Cigna Corp. limited the market's advance.

The Dow Jones industrial average rose 12.03 to 8,027.53, its highest close since Aug. 11. The 30-stock average swung in a 49.61-point range -- its narrowest in almost two months.

Broad market indexes set records. The Standard & Poor's 500 index rose 5.05 to 960.46; the Nasdaq composite index gained 12.11 to 1,702.41; the Russell 2,000 index of small capitalization stocks added 2.25 to 456.94; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, jumped 44.01 to 9,286.82; the American Stock Exchange composite index increased 1.69 to 704.96; and the S&P 400 midcap index gained 1.65 to 334.32.

About 475 million shares changed hands, 90 percent of the three-month daily average as some investors observed Rosh Hashanah, the Jewish New Year.

Advancing stocks outpaced decliners 1,655 to 1,193 on the New York Stock Exchange.

Stocks benefited from a drop in bond yields one day before the government's monthly report on employment, which is expected show the economy continues to expand with little threat of inflation. The yield on the benchmark 30-year Treasury bond slid 2 basis points to 6.30 percent.

BankAmerica rose $1.25 to $76.5625; Norwest Corp. gained $1.3125 to $63.50; and U.S. Bancorp gained $2 to $99.5625.

Citicorp jumped 37.5 cents to $135.25; Chase Manhattan Corp. climbed 87.5 cents to $120.4375; and BankAmerica Corp. rose $1.25 to $76.5625.

Cigna tumbled $8.25 to $172. The Philadelphia-based insurer expects third-quarter earnings to fall short of estimates because of higher-than-expected medical costs. The $3.35 a share the company now forecasts for the quarter is 5 percent below the $3.53 a share analysts expected.

The Boeing Co.'s shares fell $1.4375 to $52.50 after Byron Callan, an analyst at Merrill Lynch & Co., trimmed his estimate for third-quarter earnings to 46 cents a share from 53 cents. Callan cited concern that margins on Boeing's commercial aircraft business may fall.

WorldCom Inc. was one of the big gainers on the day, surging $3.50, or 9.2 percent, to $37.875. The company announced a plan Wednesday to buy MCI Communications Corp. for $33.8 billion. Investors are betting the transaction will go through and propel WorldCom into the No. 2 position among U.S. long-distance companies from No. 4.

AT&T Corp., the holder of the No. 1 spot, fell 68.75 cents to $43.5625.

Brooks Fibers Properties Inc. rose $5.50 to $60.1875 on news that WorldCom agreed to buy the local phone company for $2.9 billion.

Columbia Gas System Inc. jumped $1.875 to $72.625, Enron Corp. climbed 68.75 cents to $39.50 and Houston Industries Inc. climbed 56.25 cents to $22.3125.

Pub Date: 10/03/97

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