Cable TV, drug stocks surge Dow up 6 in mixed trading


NEW YORK -- U.S. stocks ended mixed yesterday as positive corporate news in the pharmaceutical and cable television industries helped offset concern about inflation leading interest rates higher.

"There's a few key stocks, but I still don't see any broad-based leadership," said Kenneth P. Ducey, director of trading at BT Brokerage. "[The market] seems like it can't make up its mind on what to do."

The Dow Jones industrial average closed up 6.92, at 3449.93. Since setting a record 3482.31 Wednesday, the average has dropped every day. Standard & Poor's 500-Stock Index inched 0.81 higher, to 440.37.

Other market indexes were mostly higher. The American Stock Exchange Market Value Index closed unchanged, at 427.46. The Nasdaq Composite Index closed up 1.59, at 677.96.

Decliners outnumbered gainers 9-to-7 on the New York Stock Exchange and 10-to-9 on the Nasdaq.

Analysts said gains in the stock market were constrained by inflation concern, which was sparked by last week's consumer and wholesale price reports from the Labor Department.

"I think the main point is inflation probably bottomed out at 3 percent or so," said James R. Solloway, director of research at Argus Research Co. "That would also suggest," he said, "that interest rates are at their bottom."

The inflation fears were fueled by yesterday's meeting of the Federal Reserve's Federal Open Market Committee, analysts said. As inflation rises, concern grows that the Fed's policy-making arm will adopt a policy leading short-term interest rates up.

"People are a little concerned about inflation," said James Toth, head of equity trading at McDonald & Co. Securities.

Interest-rate-sensitive industry groups, such as money-center and regional banks, were among the worst performing issues amid concern about rising rates. Drug and cable stocks were among the best performing industry groups.

Drug stocks are rising on reports the Clinton administration's health care advisers favor drug price guidelines over imposed price controls. Shares of Merck & Co. closed up $1.25, at $38.625. Pfizer Inc.'s stock was up $1.25, at $71.

Cable issues will be buoyed by US West Inc.'s alliance with Time Warner Co., the nation's second-largest cable operator. US West plans to invest about $2.5 billion for a 25 percent stake in Time Warner's cable and entertainment operations. Time Warner closed up $1.50, at $35. The nation's largest cable operator, Tele-Communications Inc., was up 50 cents, at $18.75.

The benchmark 30-year Treasury bond eased 10/32 to yield 6.97 percent, up three basis points. The yield stands at its highest level since April 5.

Trading on the New York Stock Exchange was below average. About 228 million shares changed hands, down compared with a three-month daily average of 261.4 million shares.

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