Stocks advance on investor optimism Profit damage from Asia seen as limited

Intel may add to gains

Dow up 84.95

January 14, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks yesterday had their biggest advance this year amid optimism that the damage to U.S. profits from Asia's economic crisis will be limited.

Analysts predicted that today could bring more gains, on the strength of Intel Corp.'s report of unexpectedly strong earnings after the markets closed yesterday.

"Intel beat estimates by about 10 percent, which for a company this size is meaningful," said Franklin Morton, director of research at Ariel Capital Management in Chicago, which oversees $2 billion. "It's a positive for the market."

The Dow Jones industrial average rose 84.95 to 7,732.13, bringing its two-day gain to 2 percent. The 30-stock average lost 4.8 percent last week, its worst weekly performance in eight years.

Even before Intel's earnings report, technology stock investors took heart from Motorola Inc.'s profit. Motorola rose $3 to $57.50, even though its fourth-quarter earnings fell 3 cents short of expectations.

Intuit Inc. rose $5.0625 to $40.125; Bay Networks Inc. gained $3 to $28.4375; and EMC Corp. added $3.3125 to $28.50.

The Standard & Poor's 500 index rose 12.91 to 952.12, and the Nasdaq composite index climbed 34.05, or 2.3 percent, to 1,541.63.

Intel rose $1.3125 to $76.9375 before its profit report. The world's largest computer chipmaker earned 98 cents a diluted share in the fourth quarter, above the average estimate of 90 cents from 32 analysts surveyed by First Call Corp. Profit fell 8.9 percent, less than expected.

Texas Instruments Inc. gained $4.75 to $47.25; Lattice Semiconductor Corp. rose $4.25 to $46.50; and Xilinx Inc. rose $3.1875 to $37.25.

Dow Chemical Co. fell $1.75 to $92.50; DuPont Co. slid 18.75 cents to $54.4375; and Rohm & Haas Co. fell $3.1875 to $82.375.

Stock markets from Hong Kong to Singapore recovered most of their losses from the previous session as interest rates fell. Before yesterday's rally, Singapore's benchmark Straits Times industrial index had lost about 30 percent of its value in 1998 in U.S. dollars.

A report showing inflation remained tame in December helped reinforce the perception that interest rates can fall further. The consumer price index rose 0.1 percent in December, matching the average forecast of economists surveyed by Bloomberg News.

The yield on the benchmark 30-year Treasury bond, which reflects expectations for inflation, rose to 5.73 percent, after falling to a record low of 5.69 percent Monday.

Cooper Cameron Corp. rose $3.625 to $50.625 and Schlumberger Ltd. rose $2.3125 to $71.875.

Intel, Oracle, Corporate Express Inc., Applied Materials Inc. and Seagate Technology Inc. were the most actively traded U.S. stocks yesterday.

U.S. Office Products Co. rose $2.8125 to $20.5625. The company said it will buy back 28 percent of its shares for about $1 billion and spin off four units to focus on its office-products and Mail Boxes Etc. businesses.

CBS Corp. rose 87.5 cents to $28.375 after winning the right to televise National Football League games.

Corporate Express fell $3 to $8.3125. The company said earnings growth will slow during the next two years as the office- supplies retailer expands the services it offers to corporate customers.

Adtran Inc. rose $3.4375 to $27.4375 after the telecommunications equipment company's fourth-quarter profit exceeded expectations as sales rose and margins widened.

ChiRex Inc. dropped $2.125 to $11.625. The drugmaker said fourth-quarter profit declined in part because of write-offs on its stock of phentermine, part of the "fen-phen" diet treatment.

Ameritech Corp. rose $1.75 to $84.125 after the regional Bell said fourth-quarter profit rose 11 percent to a record as demand for phone lines and cellular service boosted revenue.

Computer Language Research Inc. rose $8.4375 to $22.1875. Thomson Corp. agreed to buy the company for $325 million, adding tax-preparation software to the information services that it provides to clients such as accounting firms.

Pub Date: 1/14/98

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