Stocks rise after 3-day slide Dow's close at 9,055

Drop in jobless rate is said to spur optimism

May 09, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose for the first time in four days, as an unexpected drop in the unemployment rate spurred optimism for faster profit growth.

General Electric Co. led the gains after its chairman predicted annual revenue of $125 billion by 2000. And signs that inflation isn't about to accelerate and cause interest rates to rise, coupled with indications that corporate profits are expanding, spurred confidence that stocks have room to rise.

The Dow Jones industrial average rose 78.47 to 9,055.15, 92 points below where it began the week after reaching a record Monday.

The Standard & Poor's 500 index rose 13.00 to 1,108.14, paced by GE, up $1.3125 to $83.1875. The Nasdaq composite index jumped 29.23 to 1,864.37, its biggest gain in two months.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks rose 3.55 to 479.51; the Wilshire 5,000 index gained 113.48 to 10,572.92; the American Stock Exchange composite index climbed 1.98 to 744.23; and the S&P 400 midcap index added 3.98 to 374.61.

The Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, rose 2.11 to 240.22.

About nine stocks rose for every five that fell on the New York Stock Exchange, where about 567 million shares changed hands. An average 617 million shares traded daily on the Big Board this year.

Bank shares rose on the prospect that low borrowing costs will drive demand for loans. Keycorp gained $1.5625 to $39.0625; First Union Corp. climbed $1.0625 to $58.8125; and Fleet Financial Group Inc. rose $1.125 to $82.

Automakers rose for a third day in the wake of the Chrysler Corp.-Daimler-Benz AG plan to merge. The deal represents a continuing push by U.S. companies to boost their profits by expanding into new markets. Already this year, four of the biggest 10 mergers in world history have been announced.

General Motors Corp. rallied $1.8125 to $68.6875; Ford Motor Co. gained 18.75 cents to $45.8125; and Daimler-Benz's American depositary receipts jumped $5 to $111.375. Chrysler rose 31.25 cents to $53.8125.

First Years Inc. rose $4 to $36. The maker of child care accessories said it earned 44 cents a share in the first quarter, topping the 38-cent analyst forecast. The Avon, Mass., company also said it will split its stock 2-for-1.

Advanced Tissue Sciences Inc. rallied $2.0625 to $10.9375. The U.S. Food and Drug Administration will approve its artificial skin treatment for sores and ulcers in coming weeks, Business Week reported. Advanced Tissue's product won the backing of an advisory committee to the FDA in January. Organogenesis Inc., a competitor, was unchanged at $32.125.

Yesterday's labor report was welcome relief for the stock market after a three-day slide that lopped 2.3 percent from the Dow industrials.

The day's most active stocks in U.S. trading were Microsoft Corp., Intel Corp., Compaq Computer Corp., Geotek Communications Inc. and Dell Computer Corp.

Pub Date: 5/09/98

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.