Stocks jump into the new year Dow industrials rise 56 points, to 7,965

bond yields at 4-year lows

January 03, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose on the first trading day of 1998 as bond yields fell to four-year lows and the dollar rose to a 5 1/2 -year high against the yen.

A report showing restrained growth in U.S. manufacturing last month sparked the bond rally and reinforced expectations for slow inflation and low interest rates in 1998.

Traders sold yen on concern that Japan isn't moving swiftly enough to spur consumer spending or keep more of its financial institutions from going bankrupt.

The Dow Jones industrial average rose 56.79 points to 7,965.04, bringing its gain for the week to 285 points, or 3.7 percent. The Standard & Poor's 500 index rose 4.57, or 0.47 percent, to 975.00, and gained 4.1 percent for the week.

Computer stocks rose, sending the Nasdaq composite index up 11.18 to 1,581.53. For the week, the index gained 4.6 percent as investors snapped up shares of companies whose stocks have been battered in recent months.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks slid 0.50 to 436.52 yesterday; the Wilshire 5,000 index climbed 29.51 to 9,327.70; the American Stock Exchange composite index lost 2.07 to 682.54; and the S&P 400 mid-cap index dropped 1.27 to 332.10.

About 366 million shares changed hands on the New York Stock Exchange, below the three-month average of 559 million shares.

AT&T Corp. dropped $2.5625 to $58.75, shaving 10 points from the Dow, in the wake of a federal judge's decision in Dallas that struck down parts of the Telecommunications Act that hindered the Baby Bell telephone companies from offering long-distance phone service to local customers.

The Baby Bells -- regional companies spun off from AT&T -- gained on the ruling. Ameritech Corp. jumped $1.375 to $81.875; SBC Communications Inc. rose $1.6875 to $74.9375; BellSouth Corp. rose 43.75 cents to $56.75; and U S West Communications Group rose $1 to $46.125.

MCI Communications Corp. lost 12.5 cents to $42.6875; WorldCom Inc. slid 31.25 cents to $29.9375; and Sprint Corp. lost 62.5 cents to $58. GTE, a regional telephone company not bound by the act's restrictions, fell $1.4375 to $50.8125.

Compaq Computer Corp. rose $3.125 to $59.625; Hewlett-Packard Co. jumped $2.1875 to $64.5625; Dell Computer Corp. rose $1.75 to $85.75; and Apple Computer Inc. rose $3.125 to $16.25.

Microsoft Corp. jumped $1.875 to $131.125, amid speculation that the software company will unveil a $1 billion investment in Tele-Communications Inc. at next week's Consumer Electronics Show in Las Vegas to speed development of television set-top boxes that link TVs to the Internet.

TCI rose 37.5 cents to $28.3125.

Sybase Inc. dropped $3.375 to $9.9375 after the database software company said that, at best, it will show a profit of 2 cents a share and could lose as much as 7 cents.

Multimedia Games Inc. tumbled $3.50 to $11.0625 after federal agents searched its offices on New Year's Eve for evidence that its MegaMania electronic bingo games used on American Indian reservations may violate gambling laws.

Cisco Systems Inc. rose $2.3125 to $58.0625. The company will ship the first version of its newest switching technology in the second quarter of 1998, entering a market for the sophisticated networking equipment already introduced by several rivals.

Kaiser Ventures Inc. dropped $1.75 to $10.25 after a tentative court ruling rejected the environmental-services company's latest proposal for a landfill project in Southern California.

Brock International Inc. jumped $1 to $4.50 after the company said it expects to report a profit, before a charge, for the fourth quarter. A year earlier, the maker of sales and marketing software posted a loss of $7.3 million.

The yield on the benchmark 30-year Treasury bond fell to 5.82 percent from 5.92 percent.

Pub Date: 1/03/98

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