Stocks rebound after early sell-off Dow recovers to finish at 8,032.01, out-of-favor sectors attract buyers

Wall Street

December 04, 1997|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks climbed yesterday, rebounding from an early slump, as investors piled back into out-of-favor shares such as Western Atlas Inc. and other oil service companies.

Investors expect stocks to gain in 1998, but they are shying away from companies vulnerable to an economic slowdown in Asia. 3Com Corp. and other computer-related companies have warned of disappointing profits because of falling demand in the region.

"Stock selection will be critical. We are going to have earnings disappointments because of what's going on in Asia," said Alan Wapnick, who supervises the Lexington Growth & Income Fund and other private accounts totaling $700 million in domestic stocks.

The Dow Jones industrial average gained 13.18 to 8,032.01, rising from a 56-point drop. The Standard & Poor's 500 index rose 5.09 to 976.77, less than 7 points from its Oct. 7 high close. Western Atlas, which does seismic surveys, was the top gainer, rising $4.125, or 6 percent, to $71.50.

The Nasdaq composite index, filled with computer shares, rose 8.76 to 1,615.13, recovering from a 15-point loss triggered by 3Com's warning.

Telephone shares soared to records, including A&T Corp., up 81.25 cents to $57.125, and regional carriers BellSouth Corp., up $2.875 to $56.8125; Ameritech Corp., up $3 to $80.0625; and Bell Atlantic Corp., up 81.25 cents to $89.50.

AT&T gained after the Wall Street Journal reported that C. Michael Armstrong, the telecommunications giant's new chief executive, will sell assets and discontinue operations to prepare the company for competition in the long-distance market.

The Journal also said Armstrong is interested in renewing merger talks with SBC Communications Inc. SBC rose $2.50 $to 74.9375.

3Com fell 37.5 cents to $34.9375, paring a $3.5625 decline. National Semiconductor, a 3Com supplier, dropped $1.625 to $30.6875.

Computer networking companies, including Cisco Systems Inc. and Bay Networks Inc., turned losses into gains by day's end. Cisco rose 40.63 cents to $86.9063 and Bay Networks rose $1.1875 to $28.9375.

H. J. Heinz Co. rose $2.625 to $55.25, a day after the ketchup and cat food company said Anthony O'Reilly, its chief executive since 1979, will resign. He'll be replaced by Heinz President William Johnson effective April 30.

BB&T Corp. rose $8.5625 to $64.625, a record. The Salem, N.C.-based bank was added to the Standard & Poor's 500 index after the close of trading. Money managers who track the index's performance bought the stock.

Minnesota Mining & Manufacturing Co. fell $2 to $96.3125 after Eastman Kodak Co. sued the manufacturer for alleged trade-secret theft of photographic film techniques.

CBS Corp. lost $1.75 to $30.125 after its rating was cut to "neutral" from "outperform" by Morgan Stanley, Dean Witter, Discover & Co. analyst Frank Bodenchak.

Pub Date: 12/04/97

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