Orders guided by computer lift Dow Industrial average closes 21.89 points higher after 12 programs kick in

September 19, 1998|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose yesterday for the fourth time this week, as gains in telephone and tobacco shares offset declines in companies whose fortunes depend on a growing economy.

Traders attributed the late-day rise to the simultaneous expiration of futures and options on U.S. stock indexes and options on individual stocks.

Six computer-guided buy programs and six sell programs had the net effect of adding about 66 points to the Dow, and eight points to the S&P 500, according to research firm Birinyi Associates Inc.

The Dow Jones industrial average rose 21.89 to 7,895.66 in the late rally, after teetering between gains and losses all day. Philip Morris Cos. was the Dow's biggest gainer.

The Standard & Poor's 500 index gained 1.22 to 1,020.09, as SBC Communications Inc. led a rally in telephone shares. The Nasdaq composite index climbed 17.52 to 1,663.77.

Among other broad indexes, the Russell 2,000 index of small capitalization stocks rose 7.97 to 363.26; the Wilshire 5,000 index gained 38.35 to 9,361.48; the American Stock Exchange composite index climbed 5.91 to 627.16; and the S&P 400 midcap index added 2.36 to 307.86.

The Sun-Bloomberg Maryland index of the top 100 Maryland stocks gained 1.67 to 181.06.

About 795 million shares changed hands on the New York Stock Exchange, the second highest all week. Yet it was the first day since Aug. 20 the Dow average failed to swing at least 100 points during trading.

About three stocks rose for every two that fell on the New York Stock Exchange, as 26 stocks reached 52-week highs and 158 fell to lows.

For the week, the Dow average gained 1.3 percent, the S&P 500 rose 1.1 percent and the Nasdaq composite rose 1.4 percent.

SBC Communications led Baby Bells higher, rising $2.25 to $41.4375. Bell Atlantic Corp. climbed $2.0625 to $45.0625 and AT&T Corp. added $1.6875 to $59.

No. 1 tobacco company Philip Morris, which has the second highest dividend yield of the Dow industrials after J. P. Morgan & Co., rose $1.6875 to $46.25.

Dow Chemical Co. dropped $2.875 to $80.5625.

Procter & Gamble Co. rose $2.125 to $68.9375.

Gillette fell 31.25 cents to $36.5625, its lowest level since March 31, 1997.

Royal Dutch/Shell Group, the world's largest publicly traded oil company, said it will write down some assets because of waning Asian demand and plummeting oil prices. American depositary receipts for Shell Transport & Trading Co., which owns 40 percent of Royal Dutch, dropped $2.1875 to $34.75 and Royal Dutch Petroleum Co., which owns the rest, fell $2.6875 to $46.1875.

Exxon Corp. fell 43.75 cents to $68.125. Chevron gained $1.875 to $83.375, accounting for 39 percent of the Dow's gain.

Cytec Industries Inc. fell $8.1875 to $15.875 after warning that profit would fall well below analyst expectations for the next two quarters and in 1999 because of unexpectedly low demand in North America for aerospace products, and the worsening Asian and Latin American economies.

Banks fell after BankBoston Corp. said its third-quarter trading loss is 50 percent higher than originally announced, primarily because of losses in high-yield corporate bonds and emerging markets. BankBoston lost $2.0625 to $36.6875 and BankAmerica Corp. dropped $3 to $59.625.

Lehman Brothers Holdings Inc., the fourth biggest U.S. securities firm, sank $3.4375 to $33.875, below its book value of $36.94. Book value represents the breakup value per share if the company were liquidated.

DuPont Co. fell 43.75 cents to $57.9375, losing a 1.75-point gain after winning U.S. regulatory approval to sell Sustiva, a once-a-day drug hailed as perhaps the most important advance in HIV therapy since combination treatments.

Pub Date: 9/19/98

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