Stocks up in slowest trading day of '97 U.S. investors seem reassured by IMF's pledge of aid to S. Korea

Wall Street

December 27, 1997|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose in the slowest trading day of the year yesterday, after the International Monetary Fund and Group of Seven nations pledged to speed $10 billion in aid to South Korea, igniting a rally in Korean shares.

"The IMF is stepping up and providing more stability to world markets," said Bill O'Hearn, a San Francisco-based money manager with McKinley Capital Management Inc., which oversees about $1 billion. "Psychologically, it's reassuring for U.S. investors."

The Dow Jones industrial average rose 19.18, or 0.3 percent, to 7,679.31, led by International Business Machines Corp., up $2.56 to $101.69. The Standard & Poor's 500 index rose 3.76, or 0.4 percent, to 936.46, and the Nasdaq composite index rose 11.85, or 0.8 percent, to 1,511.38.

Investors apparently attached little importance to yesterday's abbreviated session, which ended at 1 p.m., three hours early.

In the slowest day of the year, 154 million shares changed hands on the New York Stock Exchange, less than one-third the three-month daily average of 565 million shares. "You have about a quarter of Wall Street working today," said Doug Myers, a trader with Interstate/Johnson Lane Inc. in Atlanta.

For the week, the Dow lost 1 percent, the S&P fell 1.1 percent and the Nasdaq declined 0.9 percent.

MCI Communications Corp. rose 25 cents to $42.75 after the No. 2 U.S. long-distance phone company said on Wednesday that it will take pretax charges of as much as $750 million in the fourth quarter.

MCI will take the charges to pay for job cuts, employee bonuses and the upgrade of computer systems.

The charges will reduce fourth-quarter earnings by about 60 cents a share, analysts said, resulting in a loss. Before the charges, MCI was expected to earn 14 cents a share, based on a survey of 12 analysts by IBES International Inc.

Drug stocks were the biggest gainers in the S&P after falling Wednesday. Merck & Co. gained $2.25 to $103.50. Pfizer Inc. rose $1.19 to $71.94, and Schering-Plough Corp. gained $1.81 to $59.

United Federal Savings Bank rallied $4 to $21 after Triangle Bancorp Inc. agreed to buy the bank for $72 million in stock, as Triangle expands in North Carolina.

Triangle fell 50 cents to $34.50. Under terms of the agreement, Triangle agreed to pay 0.63 share for each United Federal share. That values United at $22.05 a share, a 30 percent premium over Wednesday's closing price and a 60 percent premium over Tuesday's closing price.

General Electric Co. fell 25 cents to $70.81 after its NBC unit said "Seinfeld" will end production at the close of this television season. The show has made more than $200 million a year in profits for NBC, the New York Times said.

In South Korea, the benchmark Kospi index of 775 companies surged 6.74 percent, as the won, the national currency, gained 22.7 percent against the dollar, its biggest-ever gain.

Stock in Citicorp and other banks that do extensive business in Asia rose. Citicorp gained $1.56 to $121.94. Chase Manhattan Corp. gained $2.31 to $106.69, and J.P. Morgan & Co. gained 69 cents to $111.44.

Pub Date: 12/27/97

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