Stocks rebound after week of losses

American Express leads Dow's 92-point increase

Nasdaq, S&P 500 also rise

May 29, 1999|By BLOOMBERG NEWS

NEW YORK -- U.S. stocks rose yesterday, after five declines in the past six sessions left many shares inexpensive relative to the outlook for corporate profits.

Drugmakers, financial and computer-related shares, among the biggest losers this week, led the gains. Almost twice as many stocks rose as fell on the New York Stock Exchange, where about 657.8 million shares changed hands.

The Dow Jones industrial average rose 92.81 to 10,559.74, paced by American Express Co. The Standard & Poor's 500 index climbed 20.43, or 1.6 percent, to 1,301.84. The Nasdaq composite index gained 51.37, or 2 percent, to 2,470.52, led by Microsoft Corp.

Yesterday's gain follows the worst week for the Dow since Jan. 15, and since mid-April for the S&P 500 and Nasdaq. After falling 2.5 percent this week, the Dow is down 5 percent from its most recent high. The S&P 500, down 2.1 percent, is also 5 percent below its record, and the Nasdaq's 2 percent slump left it down 9 percent from its peak.

The Dow finished down 2.1 percent for this month, its steepest monthly decline of the year. But it is up 15 percent for the first five months of this year, a much stronger performance than many expected when the year began.

Trading was light yesterday as market professionals eased into the three-day holiday weekend. U.S. financial markets will be closed Monday in observance of Memorial Day.

Financial stocks recovered most of what they lost earlier in the week. American Express rose $4.3125 to $121.1875; Citigroup Inc. gained $2.8125 to $66.25; and Morgan Stanley Dean Witter & Co. added $2.4375 to $96.50.

Bank of America Corp. climbed $2.1875 to $64.6875 after it was upgraded to "outperform" from "neutral" by David Hilder, an analyst with Morgan Stanley Dean Witter. The largest U.S. bank reduced its international trading and lending risk in the past six months without jeopardizing earnings, Hilder said.

Pfizer Inc. climbed $3.125 to $107, and Merck & Co. closed up $1.50 to $67.50.

Microsoft, the world's largest software maker, led computer-related shares higher with a $2.3125 gain to $80.6875. Oracle Corp. rose $1.25 to $24.8125 and Yahoo! Inc., the largest Internet directory, climbed $14.625 to $148. Amazon.com rose $4.1875 to $118.75.

General Motors Corp., the world's largest automaker, gained 50 cents to $69 after it completed its separation from No. 1 auto-parts maker Delphi Automotive Systems Corp. in a $9.3 billion distribution that lets GM focus on cars while Delphi builds its business. Delphi slipped 87.5 cents to $19.625.

In Canada, TD Bank rose C$1.65 to C$77.80, climbing 3.5 percent since it said Thursday that it will split its stock 2-for-1 for the first time in 10 years, effective July 6, and raise its quarterly dividend. TD was the most active issue in Toronto.

Canadian Imperial Bank of Commerce climbed C$0.35 to C$36.00 and Royal Bank of Canada added C$0.20 to C$67.50.

Nortel Networks Corp. rose C$4.55 to C$110.55. BCE, which owns 41 percent of Nortel, climbed C$0.95 to C$67.85. Bombardier rose C$0.35 to C$22.90.

Copper fell for a third day, ending its worst month in three years and closing near a 12-year low on signs a global surplus will last longer than expected. Prices aren't expected to climb after Broken Hill Proprietary Co. delayed a decision about whether to close its U.S. mines.

Alcan declined C$2.25 to C$41.20; Inco Ltd. fell C$0.50 to C$21; and Noranda fell C$0.10 to C$17.20.

Barrick Gold Corp., the world's fourth-largest gold producer, fell C$0.30 to C$25.40, Placer Dome Inc. slipped C$0.60 to C$16.40, and other gold miners declined.

Overseas, Japan's Nikkei stock average fell 1.26 percent. Germany's DAX index closed up 0.1 percent, Britain's FT-SE 100 was up 0.4 percent, and France's CAC-40 closed 0.3 percent lower.

Pub Date: 5/29/99

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