NEW YORK -- U.S. stocks rose yesterday for the first time in six sessions, led by airlines such as UAL Corp. and beaten-up bank shares, including J. P. Morgan & Co., as investors called previous estimates of Asia's damage to U.S. profits too pessimistic.
"Portfolio managers are beginning to see how to navigate the Asian crisis," said J. Thomas Madden, chief investment officer at Federated Investors in Pittsburgh, which oversees $90 billion.
The Dow Jones industrial average rose 84.29, or 1.1 percent, to 7,922.59, after falling 3.8 percent last week. Walt Disney Co. led the gains, rising $3.50 to $97.125 after a record-breaking $39.2 million weekend opening for its low-budget film "Scream 2."
The Standard & Poor's 500 index rose 10.00 to 963.39.
The Nasdaq composite index, packed with technology shares, fell 0.02 to 1,536.61, recovering from a 21-point loss. The Nasdaq initially declined after analysts at BancAmerica Robertson Stephens said Intel Corp., Microsoft Corp., Dell Computer Corp., and Compaq Computer Corp. could suffer from weak personal computer demand in the first half of the year.
Among other broad market indexes, the Russell 2,000 index of small capitalization stocks lost 1.87 to 420.76; the Wilshire 5,000 index, made up of stocks on the New York, American and Nasdaq stock exchanges, climbed 64.91 to 9,162.76; the American Stock Exchange composite index slid 0.63 to 665.27; and the S&P 400 midcap index gained 0.74 to 320.96.
Intel rose $1.625 to $72.125; Microsoft fell 62.5 cents to $136.125; and Compaq lost $1.8125 to $54.50.
The market's gains masked carnage in oil-field service companies, which tumbled on concern that oil and gas companies won't increase spending on drilling wells when oil prices are falling. The Philadelphia oil services index dropped 4.7 percent, led by Cooper Cameron Corp., down $3.50 to $55.875. The index is still up 23 percent for the past six months.
Lower oil prices help UAL and other airlines, though. The parent company of United Airlines jumped $5.375 to $89.50 after it said it would meet or beat earnings estimates of $1.58 a share for the fourth quarter as strong U.S. demand and lower fuel prices more than compensate for lackluster revenue growth in Asia.
Acquisition announcements boosted the shares of Lukens Inc., Piper Jaffray Cos. Gulf South Medical Supply Inc. and Handy & Harman.
Lukens jumped $6.375 to $23.875 after Bethlehem Steel Corp. said it will buy the Coatesville, Pa., holding company for $650 million in stock and debt, or $25 a share. Bethlehem Steel rose 18.75 cents to $8.3125.
Piper Jaffray rose $6.625 to $36.375 after U.S. Bancorp agreed to buy the Minneapolis-based brokerage for about $730 million in cash. The transaction, which creates the 11th-largest retail brokerage in the nation, values Piper Jaffray at $37.25 a share, a 25 percent premium to the company's closing price Friday of $29.75. U.S. Bancorp rose $1.75 to $115.
Gulf South Medical rose $2.0625 to $31.125, after Physician Sales 7 Services Inc. agreed to buy the company for $685 million in stock, or $40.25 a share based on Friday's closing price, a 38 percent premium.
Handy & Harman rose $10.1875 to $32.4375, a 52-week high, after WXH Corp. announced plans to buy the precious metal manufacturer for $30 a share.
Earlier, in South Korea, the prospect of billions of dollars in emergency credit from the International Monetary Fund helped pull the country a step back from the financial brink. The won rose 10 percent to 1,563.9 against the dollar, and the benchmark stock index soared 7.22 percent -- its biggest one-day percentage rise ever.
Some technology shares fell last week on concern that a financial collapse in South Korea would damage their profits. Applied Materials Inc., the leading maker of chip manufacturing equipment, rose $1.9375 to $28.0625 yesterday, after dropping 25 percent last week.
J. P. Morgan, which lost 6.7 percent last week after warning that unsettled global markets would hurt its profits, rose $2.6875 to $119.75. Citicorp, which also does a lot of business overseas, rose $5.3125 to $132.125, after losing 9.3 percent last week.
Ballard Power Systems Inc. rose $6.6719 to $69.1719 after Ford Motor Co. invested $420 million in cash, technology and assets in an alliance with Ballard and Daimler-Benz AG to develop fuel-cell engines that run on hydrogen and oxygen to install on cars and trucks beginning in 2004.
Anchor Gaming Corp. rose $8.4375 to $51.9375 after the company said it expects fiscal second-quarter earnings of $1.10 to $1.20 a share, easing concern sparked by a warning earlier this month that the slot-machine maker might not meet analyst expectations.
Pub Date: 12/16/97