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Philip Morris leads cyclicals rally Dow up 6


NEW YORK -- U.S. stock prices advanced yesterday as shares of Philip Morris Cos. and companies sensitive to cycles in the economy led the charge.

The Dow Jones industrial average rallied 6.09 points, to 3,443.28. Computer-generated sell orders knocked about 15 points off the Dow in the final 20 minutes of trading.

Philip Morris, which jumped $1.75, to $52.75, led the advance for most of the day. Cyclical issues such as Eastman Kodak Co., Caterpillar Inc. and Goodyear Tire & Rubber Co. also contributed to the gains.

"Every dog is allowed to have its day," said Dennis Jarrett, chief market analyst at Kidder Peabody & Co. "The general thrust is still to be a little leery."

"Investors have been betting for over a year" on cyclical issues, said Rao Chalasani, chief investment strategist at Kemper Securities. "It's just been a little irregular."

The Standard & Poor's 500-Stock Index ended 0.48 higher, at 442.79, while the American Stock Exchange Market Value Index rose 0.63, to 426.69. The Nasdaq Combined Composite Index gained 1.38, to 682.82.

The over-the-counter market was being led higher by gains in Microsoft Corp. Shares of the software company closed up $2.125, at $89.125, on reports that its chief executive, William Gates, planned to meet later this month with International Business Machines Corp.'s new chief executive, Louis V. Gerstner Jr. That could pave the way for a reconciliation between the two companies, some analysts said.

Trading was light on the New York Stock Exchange, with about 235 million shares changing hands, compared with a three-month daily

average of 262.4 million shares. Advancing issues on the Big Board led decliners by 8-to-7.

"Institutions, by and large, are sitting tight," said Alan Ackerman, executive vice president at Reich & Co. "Individual investors are carrying the ball rather than institutions. Trading has become an art based on reaction time in milliseconds."

Investors still expect stocks to ease this week as investors focus on the Treasury's quarterly refunding, traders said. The benchmark 30-year Treasury bond rose 1/2 -point, to yield 6.8 percent, in brisk trading. About $29.4 billion of Treasuries traded, well below the daily average of about $62 billion, according to the bond pricing service, Govpx Inc.

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