Technologies bolster mixed market

THE BALTIMORE SUN

NEW YORK -- U.S. stocks were mixed yesterday as Intel Corp. led a rally in technology stocks that offset concern about interest rates and Mexico's financial crisis.

Gains by Intel helped semiconductor and computer shares to rise after an analyst at Merrill Lynch & Co. raised his estimate for the chipmaker's 1995 earnings to $7.90 a share from $7.

That sent Intel stock up $1.875, to $64.375 -- its highest in more than three weeks.

"Clearly, people are expecting the technology stocks to be the leaders in 1995," said Ric Dillon, a principal at Dillon Capital Management. "That explains the interest here at the end of the year."

A rally by the U.S. dollar, as panic over Mexico's economic crisis subsided and the peso steadied, gave stocks a lift. In New York trading, the dollar ended at 1.5545 marks, up from 1.5445 Wednesday, and at 99.63 yen, up from 99.30.

The Dow Jones industrial average seesawed, rising as much as 8.41 before closing down 6.06, at 3,833.43. The 15.48-point range was the narrowest since a 14.9-point swing Aug. 9. Gains in International Business Machines Corp., General Motors Corp. and United Technologies Corp. were offset by losses in Walt Disney Co., DuPont Co. and Philip Morris Cos.

Among broader market indexes, the Standard & Poor's 500 index gained 0.31, to 461.17, its fifth gain in six sessions. The Nasdaq combined composite index, which includes a large number of technology stocks, rallied 7.07, to 749.53 -- its highest close since reaching 750.32 on Nov. 30.

The technology stocks that helped to lift the Nasdaq index included 3Com Corp., up $2.1875, to $53.0625; Sun Microsystems Inc., up $1, to $36.625; Linear Technology, up $1.75, to $49.50; Sybase Inc., up $2, to $53; Lotus Development Corp., up $1.75, to $41.25; and Xilinx Inc., up 50 cents, to $60.75.

"As technology increasingly permeates our society, naturally the companies that have exposure to that have the opportunity of greater than average growth," Mr. Dillon said.

Declining stocks matched advancers on the New York Stock Exchange, where 251.6 million shares traded hands. That's below the three-month daily average of 302.9 million. The light volume may have exaggerated the move in some stocks yesterday, analyst and traders said.

Auto stocks rose after a report that U.S. vehicle production is expected to exceed Japan's output every year though the end of the decade. American manufacturers owned the top spot in 1994 for the first time since 1979, Ward's Automotive Reports said. GM gained 87.5 cents, to $42.125; Ford climbed 62.5 cents, to $27.875; and Chrysler Corp. jumped $1.25, to $49.625.

Health care and biotechnology stocks also rose, led by Amgen Inc. The world's largest biotechnology company gained $1.25, to $59.375, and was the sixth-biggest gainer in the Nasdaq.

On Wednesday, the company said the U.S. Food and Drug Administration approved its factory in Juncos, Puerto Rico. Approval means Amgen can take advantage of tax breaks given to companies operating in Puerto Rico.

The rally in Amgen helped the S&P; miscellaneous health care index rise 3.55, or 2.5 percent, to 144.96. Also gaining were U.S. Healthcare Inc., up $1.375, to $41.625; and United Healthcare Corp., which advanced $1.625, to $46.

Another biotechnology company, Chiron Corp., surged 87.5 cents, to $80.50, after the waiting period for possible U.S. antitrust action expired in connection with Ciba-Geigy AG's offer to greatly increase its stake in the company.

Offsetting stocks' gains was concern about instability in Mexico, America's third-largest trading partner, traders said. Since the Mexican government devalued its currency Dec. 19, the peso has fallen 30 percent against the dollar, raising doubts about the government's ability to repay billions of dollars of debt and about the prospects for U.S. companies doing business there.

Also dogging stocks was a government report showing that economic activity remains brisk, which raised the specter of another increase in interest rates by the Federal Reserve. The Fed has raised rates six times this year in an effort to slow the economy and cool inflation.

The government's main gauge of future economic strength -- the index of leading economic indicators -- rose 0.3 percent last month. Analysts had expected a 0.1 percent gain.

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