Stocks rise behind banks and drugs Dow industrials add 52 points, to 7,784

computer issues active

January 15, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose yesterday for a third day as investors bought shares in banks such as BankAmerica Corp. and drugmakers like Merck & Co. on optimism that their profits will be among the least hurt by an economic slowdown in Asia.

The Dow Jones industrial average rose 52.56 to 7,784.69, led by Merck, up $3.625 to $109.875. The 30-stock average has recouped more than half of last week's 384-point slide.

The Standard & Poor's 500 index rose 5.80 to 957.92, and the Nasdaq composite index gained 7.13 to 1,548.76.

Among other broad market indexes, the Wilshire 5,000 index climbed 65.27 to 9,131.34; the American Stock Exchange composite index rose 2.76 to 658.64; and the S&P 400 mid-cap index gained 2.88 to 319.99.

CitFed Bancorp rallied $11.625 to $49.375 after Fifth Third Bancorp agreed to buy the bank for about $688 million in stock. Fifth Third dropped $4.50 to $76.

Norwest Corp. rose $1.125 to $37.3125; Fleet Financial Group Inc. rose $2.50 to $71.4375; and Wells Fargo & Co. gained $3.25 to $319.125.

BankAmerica Corp. rallied $2.75 to $68.0625 after Bruce Hartley of Lehman Brothers Inc. raised his investment opinion on the bank to "buy" and said the stock could rise to 85 in the next year. He said concern over the bank's exposure to Asia is overblown; it has only 6 percent of its assets tied up in the region.

Walt Disney Co. rallied $1.50 to $96.50 after Robert Iger, president of the company's ABC Inc. broadcasting unit, said ABC expects to profit from National Football League contracts it secured for $9.2 billion. ABC outbid General Electric Co.'s NBC unit for the right to broadcast football games on Sunday and Monday nights. GE fell 31.25 cents to $74.375.

Some 1,877 stocks rose and 1,080 shares fell on the New York Stock Exchange, where about 607 million shares changed hands.

Seven of the 10 most active stocks were computer-related. Intel Corp. fell $1.50 to $75.4375, a day after rallying $1.3125. The world's largest computer chip maker reported unexpectedly strong earnings for the quarter, but said its gross margin -- the percentage of sales left after product costs are subtracted -- is expected to decline.

Lattice Semiconductor Corp. fell $2.9375 to $43.5625; Analog Devices Inc. fell $1.50 to $25; and Novellus Systems Inc. lost $1.25 to $31.875.

Tobacco shares dropped on news of heavy opposition in Congress to legislation that would protect tobacco companies from future class-action lawsuits in return for limits on advertising. Philip Morris Cos. fell 87.5 cents to $47; RJR Nabisco Holdings Corp. fell 37.5 cents to $37.6875; and UST Inc. dropped 31.25 cents to $36.375.

Rising stock markets across Asia and Europe buoyed the market, traders said, by easing concern that Asia's economic slowdown will crimp demand for stocks around the world. Hong Kong's Hang Seng index rose 5.8 percent, and Japan's Nikkei 225 index rose 2.5 percent.

Eastman Kodak Co. fell $1.8125 to $59.50 on concern that the company will report lower fourth-quarter earnings today because slumping film prices, lower sales and mounting losses from digital imaging.

Mesa Air Group Inc. dropped 75 cents to $5.25 after restating its fourth-quarter results to report a loss. UAL Corp. won't renew a code-sharing agreement that will hurt operations at Mesa's Denver system.

Netscape Communications Corp. fell $1.25 to $17.8125 after saying it will fire about 400 employees.

Dekalb Genetics Corp. fell $3.9375 to $28.125. The biotechnology company said its fiscal 1998 earnings will be less than expected because of higher seed-production costs and a loss on its hog business.

John H. Harland Co. fell $2.625 to $17.875 after the company said Robert Amman resigned as chairman and chief executive because of "differences of opinion" over corporate strategy amid a streamlining of the company's check-printing business.

Geron Corp. slid 50 cents to $13.875, a day after the biotechnology company's stock rallied 43 percent on news that its researchers have found a way to overcome the basic aging process in laboratory cells.

Linear Technology Corp. rallied $4 to $58.625 after the company said second-quarter earnings rose 38 percent, higher than expected, on strong demand for its circuits.

Pub Date: 1/15/98

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