NEW YORK -- U.S. stocks rose as banking and auto shares gained yesterday, and technology issues continued a week-long climb, on expectations for better-than-expected third-quarter earnings.
Banking shares rose amid speculation that more mergers are coming in the industry. Just last week, Chemical Banking Corp. and Chase Manhattan Corp. agreed to a $10 billion merger and National City Corp. announced plans to buy Integra Financial Corp. for $2.1 billion. Yesterday's speculation centered on a Wells Fargo & Co. bid for First Interstate Bancorp.
The Dow Jones industrial average rose 31.00, to 4,700.72, its fifth advance in the last six days and first close above 4,700 since Aug. 3. Gains in shares of Union Carbide Co., Boeing Co. and Minnesota Mining & Manufacturing Co. led the advance. For the week, the 30-stock average rose 1.14 percent.
First Interstate rallied $3.75, to a 52-week high of $100.125, amid speculation that Wells Fargo may bid as much as $120 a share for the Los Angeles-based bank, analysts said. Wells Fargo climbed $1.625, to $186.875; Citicorp jumped 50 cents, to $66.75; First Chicago Corp. rose 62.5 cents, to $64.75; and BankAmerica Corp. spurted $1.125, to $58.375.
Among broader market indexes, the S&P; 500 index rose 2.39 to an all-time high of 572.68, its 10th advance in 11 sessions and its fourth straight record. The technology stock-laden Nasdaq composite index rose 8.95, to a record 1,060.03, bringing its gain for the holiday-shortened week to 4 percent.
The Russell 2000 index of small capitalization stocks rose 2.29 to a record 314.42; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, rose 26.81 to a record 5726.79; the Amex market value index jumped 4.67 to an all-time high of 547.39; and the S&P; 400 midcap index climbed 1.33 to a record 216.85.
Yesterday's most active stocks in U.S. composite trading were Hanson PLC's American depositary receipts, Novell Inc., Intel, Aura Systems Inc. and Micron Technology Inc.
Auto issues continued to rise this week after reports of stronger-than-expected sales for August. The sales reports eased concern that the economy was slowing too much and automakers would stall. General Motors Corp. rose 50 cents, to $49.25; Ford Motor Co. spurted 75 cents, to $32; and Chrysler Corp. ended unchanged at $57.75, after climbing as high as $58.125.
Drug stocks fell. Eli Lilly & Co. was lowered to "market performer" from "outperform" by Steven Gerber, an analyst at Oppenheimer & Co. Eli Lilly dropped 75 cents, to 83.75; Pfizer Inc. shed 75 cents, to $47; and Glaxo Wellcome Plc's American depositary receipts fell 25 cents, to $24.375.
One drug stock that bucked the trend was Warner-Lambert Co., which climbed $3.875 to $92.50 after a trial found its new insulin drug troglitazone effectively lowered the glucose levels of diabetes sufferers, enabling them to take fewer daily insulin injections.
More than three stocks rose for every two that fell on the New York Stock Exchange, where about 317.9 million shares traded hands. The three-month daily average volume on the Big Board is 337.7 million shares.
Technology shares rebounded from early losses to help lead yesterday's gains. Optimism that semiconductor, software and computer issues will post better-than-expected profits offset concern that investors are abandoning technology funds after they posted double-digit returns this year.