Dow gains 15.96 to close at 9,105.74 Investors choose banks, consumer goods over uncertain prospects

Wall Street

July 11, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose as investors shunned ` industries with uncertain prospects and piled into financial and consumer goods companies that are expected to report robust profits this month.

In a seesaw session, the Dow Jones industrial average gained 15.96 to 9,105.74, after falling 60 points earlier. American Express Co., Procter & Gamble Co. and J.P. Morgan & Co. were among the Dow's biggest gainers.

The Standard & Poor's 500 index rose 5.77 to 1,164.33. The Nasdaq composite index climbed 3.22 to 1,943.04, its third straight record. Still, decliners outnumbered gainers by a 16-13 margin.

Bank shares did the best in the S&P. J.P. Morgan climbed $1.4375 to $125.9375; U.S. Bancorp. gained $1 to $46.0625; and Mellon Bank Corp. rose $1.50 to $74.

Small and mid-size companies languished again, sending the benchmark Russell 2,000 index down 1.57 to 458.43. The index is up 5 percent this year, compared with a 20 percent sprint by the mega-cap S&P.

Among other broad indexes, the Wilshire 5,000 gained 36.29 to 10,916.22; the American Stock Exchange composite index gained 2.75 to 730.66; and the S&P 400 midcap index fell .78 to 368.86.

The Sun-Bloomberg Maryland index, which tracks the top 100 Maryland stocks by market valuation, dropped 1.40 to 231.56.

The bigger-does-better trend sent Corporate America's marquee names to records: Coca-Cola Co. rose 50 cents to $87.1875; American Express rose $2.50 to $116.8125; BankAmerica Corp. gained $1.4688 to $98.6875; and Microsoft Corp. rallied $2.1875 to $113.1875. Microsoft is up 32 percent in four weeks.

For the week, the Dow changed little; the S&P rose 1.6 percent; the Nasdaq gained 2.6 percent.

DuPont Co. fell for a second day, down $2 to $68.125, after Salomon Smith Barney analyst James Wilbur cut profit estimates for the No. 1. U.S. chemicals company. On Thursday, DuPont lost 9 percent after it said it expects second-quarter earnings to fall as much as 15 percent, breaking 16 straight quarters of record earnings.

Applied Materials Inc. may tumble Monday. After the close of trading, the No. 1 semiconductor equipment maker warned that third-quarter results will be below expectations, and blamed delayed orders, weaker-than-expected personal computer sales and the struggling Asian economies. Before the announcement, Applied Materials gained 50 cents yesterday to $29.50.

Computer Associates International Inc. fell $1.9375 to $55.9375 and Peoplesoft Inc. lost $2 to $48.125 after SAP AG, Europe's largest software company, said rising labor costs and weaker Asian currencies cut into second-quarter earnings growth.

Philip Morris Cos. rose 75 cents to $40, and other cigarette makers gained, as the industry crafts a proposal to settle 37 potentially crippling lawsuits by states, offsetting concern that a slowing economy will hurt corporate profit growth. The companies would pay as much as $200 billion over 25 years to settle the lawsuits, said Sanford C. Bernstein & Co. analyst Gary Black.

RJR Nabisco Holdings Corp. gained 37.5 cents to $24.3125 after financier Carl Icahn purchased about 10 million shares. The purchase, equal to 3 percent of the company's shares, represents the second time Icahn has taken a major stake in the maker of Camel and Winston cigarettes. The investor tried to take over the company in 1995 and 1996.

Bristol-Myers Squibb Co. got a boost after two European studies of competitor Zeneca Group PLC's cancer drug contradicted findings of an earlier U.S. study that indicated the drug can prevent breast cancer. Bristol, the world's largest maker of cancer drugs, rose $1.75 to $119.5625.

Adams Golf Inc., maker of Tight Lies golf clubs, rose $2.375 to $18.375 in its first day of trading. Petsmart Inc. fell $1.3125 to $8.75 after it warned that it may just break even, or post a loss, for the second quarter.

Pub Date: 7/11/98

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