Dow rises, but Nasdaq and S&P decline Takeover news offset by concern about profits

March 03, 1998|By BLOOMBERG NEWS

NEW YORK -- The Dow Jones industrial average rose 4.73 points to 8,550.45 yesterday, but U.S. stocks were mixed as a string of takeover bids was offset by concern that rising bond yields may crimp corporate profits and lessen demand for equity mutual funds.

J. P. Morgan & Co. led the Dow's advance, as the 30-stock average eked out a fourth straight record. Morgan's shares rose $4.0625 to $123.5625. The bank's chief executive told employees last week that it was willing to consider a merger.

The Standard & Poor's 500 index slipped 1.64 to 1,047.70 and the Nasdaq composite index dropped 11.97 to 1,758.54.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks slipped .29 to 461.54; the Wilshire 5,000 index of stocks on the New York, American and Nasdaq exchanges lost 5.79 to 10,000.65; the American Stock Exchange composite index gained 4.12 to 710.24, its high this year; and the S&P 400 midcap index slid 0.24 to 353.15.

About 1,639 stocks rose and 1,274 fell on the New York Stock Exchange. More than 592 million shares changed hands on the Big Board, about average for the last three months.

U.S. companies announced about $22 billion of proposed mergers and acquisitions yesterday, extending a two-year explosion of takeovers.

Coleman Co. jumped $10.063 to $30.9375, after Sunbeam Corp. agreed to buy the maker of recreation and hardware products for $2 billion in stock, cash and assumed debt. Sunbeam also will acquire Signature Brands USA Inc., the maker of Mr. Coffee, and smoke detector maker First Alert Inc., for a total of about $2.5 billion for all three companies. Signature Brands rose $2.781 to $8.031; First Alert rose $2.031 to $5.156; and Sunbeam rose $3.875 to $45.625.

Scopus Technology Inc. rallied $4.4375 to $18.5625 after Siebel Systems Inc. said it would buy the company for $460 million to expand its offering of software used to automate sales and service departments. Siebel fell $5.875 to $55.625.

Two of the biggest takeovers announced yesterday were of U.S. companies bidding for British companies. Pacificorp offered $10.3 billion for Energy Group PLC, and Owens-Illinois Inc. said it would buy BTR PLC's glass and plastic packaging business for $3.6 billion.

American Bankers Insurance Group Inc. rose $5.125 to $61.375 after American International Group Inc. said it would amend its merger agreement with the insurer to match rival Cendant Corp.'s hostile $58-a-share bid. American International Group rose 6.25 cents to $120.25.

Computer Sciences Corp. rallied $3.25 to $107.9375 after it rejected Computer Associates International Inc.'s $9.8 billion takeover bid, recommending that shareholders reject the software company's $108-a-share offer. Computer Associates fell 62.5 cents to $46.625.

Teradyne Inc. tumbled $6.1875 to $41 amid concern that orders for its semiconductor testing equipment in the first quarter will be lower than expected.

Applied Materials Inc. fell $1.375 to $35.4375; Novellus Systems Inc. dropped $3 to $44.9375; and KLA-Tencor Corp. slid $3.1563 to $43.

Intel Corp., up 25 percent this year, fell $2.0625 to $87.625.

Callaway Golf Co. fell $3.5625 to $28.75 after the golf club maker said El Nino storms and currency turmoil in Asia could cause its fiscal first-quarter earnings to fall 70 percent below analysts' average earnings forecast.

PaineWebber Group Inc. fell $2.50 to $38.50 after the securities brokerage had no comment on speculation that it is a takeover target after its shares rose $6 to a record $41 Friday.

Compaq Computer Corp., Dell Computer Corp., Intel, Microsoft Corp. and Applied Materials were the most active stocks in U.S. trading.

The yield on the benchmark 30-year Treasury bond rose 8 basis points to 6.00 percent.

Pub Date: 3/03/98

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