Stocks rise behind computer shares Dow industrials gain 63 jTC points, to 7,819

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December 23, 1997|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose yesterday for the first time in four sessions, led by Intel Corp. and other computer-related shares that recently lagged behind the market.

"Investors are moving into beaten-up stocks, particularly technology companies," said Tony Hitschler, president of Brandywine Asset Management, which oversees $7 billion.

The Dow Jones industrial average rose 63.02, or 0.8 percent, to 7,819.31, led by Merck & Co., which rose 3.3125 to 105.9375 after receiving government clearance to sell the first pill to treat baldness. The Standard & Poor's 500 index rose 6.92, or 0.7 percent, to 953.70.

The Nasdaq composite index rose 7.32, or 0.5 percent, to 1,532.06. Intel, the most active stock in U.S. trading, rose $1.4375 to $71.4375, though it's still off 29 percent from its Aug. 20 high.

Among other broad market indicators, the Russell 2,000 index of small capitalization stocks gained 2.85 to 422.88; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, climbed 55.74 to 9,098.85; the American Stock Exchange composite index rose 2.39 to 663.07; and the S&P 400 mid-cap index gained 1.15 to 321.41.

Maryland stocks rose, led by Legg Mason Inc., which gained $3.375 to $53.625, and JP Foodservice Inc., which rose $2.25 to $34.8125.

The gains came after Asian markets had declined. Moody's Investors Service Inc. cut its investment ratings on South Korea, Indonesia and Thailand to junk, intensifying concern that a regional cash crunch will drive companies into default.

U.S. stocks were helped by acquisition announcements. Lukens Inc. jumped $4.50 to $28.50 after Allegheny Teledyne Inc. offered to acquire the steelmaker for $715 million in cash and assumed debt, topping Bethlehem Steel Corp.'s bid. Allegheny Teledyne rose $1.375 to $25.3125 and Bethlehem Steel gained 62.5 cents to $8.4375.

American International Group Inc. said it will pay $2.2 billion in stock and cash for American Bankers Insurance Group. American Bankers rose $1.4375 to $45.6875, and AIG rose $1.50 to $106.375.

American Home Products Corp. rose 75 cents to $74.875 after Tyco International Ltd. said it will buy AHP's Sherwood-Davis & Geck unit for about $1.8 billion. Tyco rose $1.9375 to $42.875.

Baltimore Gas and Electric Co. and Potomac Electric Co. canceled their $3.8 billion purchase agreement because regulators asked for too much in rate cuts from them.

BGE shares rose 68.75 cents to $32.9375 and Pepco shares fell 31.25 cents to $23.125.

Central & South West Corp. gained $1.125 to $27.125 after American Electric Power Co. said it will buy the company for $12.2 billion in stock and assumed debt, in the biggest-ever acquisition of an electric utility. The combined company will serve more than 4.6 million customers in 11 states and 4 million customers outside the U.S. American Electric fell $1.25 to $50.75.

Dynatech Corp. rose $10.1875 to $46.9375 on a report that a group of its executives and key employees and the investment firm Clayton, Dubilier & Rice Inc. will acquire the telecommunications electronics company for $49 a share, or about $900 million.

Coca-Cola Co. rose 62.5 cents to $66.0625 after it agreed to buy the Orangina brand of France's Pernod Ricard SA for 5 billion francs ($838.6 million), to expand its beverage line and build sales in Europe.

Xionics Document Technologies Inc. was the biggest loser in U.S. markets, tumbling $6.2813 to $3.5938. The developer of software for office equipment said it expects net income for the fiscal second quarter of 2 cents a share, 8 cents below analyst forecasts. The company in part blamed "increasing uncertainty in the Asian market."

Capital One Financial Corp. rose $1.8125 to $50.25 after it said it expects its 1997 earnings to exceed analyst expectations.

Pub Date: 12/23/97

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