Stocks post first gain in 5 sessions Shares that declined lately are picked up by investors

Dow rises 33.63

May 29, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose yesterday for the first time in five sessions, as investors bought shares in fast-growing companies that declined in recent weeks amid signs of slowing economies at home and abroad.

Goodyear Tire & Rubber Co., down 9 percent since March 31, was among the biggest gainers.

The Dow Jones industrial average rose 33.63 to 8,970.20, led by Goodyear, up $1.8125 to $68.875. The company's per-share earnings are expected to rise 41 percent this year, according to analysts surveyed by IBES International Inc.

Almost twice as many stocks rose as fell on the New York Stock Exchange, after losses that sent the Dow industrials down to April 1 levels.

The Dow fell 235 points in the previous four sessions.

The Standard & Poor's 500 index rose 5.36 yesterday to 1,097.59. Humana Inc. was the index's biggest gainer, rising $3.625 to $29.875 after United HealthCare Corp. agreed to buy the health insurance company for $32.10 a share. United HealthCare fell $1.625 to $62.50.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks rose 5.55 to 455.81; the Wilshire 5,000 index gained 57.99 to 10,362.05; the American Stock Exchange composite index climbed 4.74 to 713.58; and the S&P 400 midcap index added 3.58 to 358.52.

The Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, gained 0.94 to 228.77.

WorldCom Inc. rose 93.75 cents to $45.625 and MCI Communications Corp. gained $1.4063 to $53.9375, leading the Nasdaq composite index up 13.52 to 1,794.62. MCI agreed to sell its wholesale Internet business to British phone company Cable & Wireless PLC, in a bid to win approval for WorldCom's $41.8 billion purchase of MCI.

Intel Corp. fell 81.25 cents to $73.50 on reports that the Federal Trade Commission will recommend filing an antitrust lawsuit accusing the world's largest chip maker of abusing its monopoly power.

4 Intel is down 26 percent from its August record.

Retailers gained. Home Depot, which sells building materials and home improvement products, rose $3 to $77.25 after announcing a 2-for-1 stock split on Wednesday.

Costco Cos., the biggest U.S. operator of warehouse club stores, rose $1.75 to $56.75 after reporting fiscal third-quarter earnings that beat analyst estimates.

Callaway Golf Co. rose 18.75 cents to $20.875 after the Wall Street Journal reported that some investors say the stock is cheap at 11.8 times next year's estimated earnings. The shares are down 27 percent this year.

Brokerage firms gained after tumbling Wednesday. Merrill Lynch Co. gained $1.6875 to $90.1875; Paine Webber Group Inc. rose $1.3125 to $43.8125; and Bear Stearns Cos. jumped $2.125 to $56.

Stocks benefited as investors sought a haven from turbulent markets worldwide.

Russian stocks, the world's best performers for two years running, have lost 65 percent of their value since October, measured by the Russian trading system index, and Japan is mired in an economic slump.

Some investors said they're concerned that stocks aren't over the worst.

"There's still a lot of concern about what second-quarter earnings will look like," said Bill Meehan, chief market analyst at Cantor Fitzgerald Inc., a broker for institutional investors.

"The stronger dollar and declining demand abroad will cause analysts to continue to adjust their earnings estimates lower," he said.

A stronger dollar makes U.S. goods more expensive for overseas customers.

Since April 1995, the dollar has risen 74 percent against the Japanese yen.

Pub Date: 5/29/98

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