NEW YORK — NEW YORK -- U.S. stocks rose yesterday for a second day as investors looked past company warnings of slumping sales and focused on the benefits of lower borrowing costs.
An afternoon surge in bonds and a wave of computer-guided buying helped boost interest-sensitive bank and telephone shares.
The Dow Jones industrial average rose 31.77 to 5,697.48 after having been down as much as 8.87. The Standard & Poor's 500 index rose 5.88 to 678.44 as gains in telephone, drug and bank shares offset declines in gold and oil issues. The Nasdaq composite index rose 5.47 to 1,249.15.
Drug shares such as Merck & Co., Pfizer Inc. and Eli Lilly & Co. gained after Merrill Lynch & Co. said the industry should show "renewed strength" because of new product introductions.
Merck rose $1 to $66.125;, Pfizer climbed $2.125 to $74.25; Eli Lilly gained 87.5 cents to $66.25; and Abbott rose $1.125 to $43.875.
Prospects for slower growth lifted steady earners such as Coca-Cola Co. and Abbott Laboratories. The Morgan Stanley Consumer Stock Index, of which Coke and Abbott are components, rose 2.66, or 0.86 percent, to 308.92.
Coke rose $1.125 to $47.625 and Procter & Gamble Co. rose $1.625 to $90.25.
Shares of Microsoft Corp rose $3 to an all-time high of $120.875 amid optimism for the company's new 24-hour news channel, jointly developed with General Electric Co., which will begin airing July 15.
Some oil shares declined as the price of crude oil futures fell 72 cents to $19.72 a barrel for July delivery. An American Petroleum Institute report of surging stockpiles signaled supplies already are increasing as Iraq prepares to export oil for the first time in six years.
Atlantic Richfield Co. fell $1.625 to $118.625, and Chevron Corp. dropped 62.5 cents to $59.
Gold shares fell as bullion dropped $1.90 to $388.90 an ounce. Barrick Gold Corp. declined $1.375 to $29.375 and Newmont Mining Corp. backtracked $3.25 to $54.
Chip maker Altera Corp. and appliance manufacturer Whirlpool Corp. led a host of companies advising investors that profits would disappoint in the coming quarter
Semiconductor shares were particularly rattled by the warnings. Altera said its earnings for the second quarter would fall 15 percent below first-quarter levels. Its stock fell $2.25 to $45.125.
Lam Research Corp., a maker of semiconductor-manufacturing equipment, warned that earnings in the quarter ending June 30 will be about 4 percent to 5 percent below analysts' estimates because of a slowdown in sales. The stock fell $3.25 to $34.
The Philadelphia semiconductor index slid 2.24, or 1.11 percent, to 199.03.
Another warning came from Proxima Corp., a maker of desktop projectors for business presentations, which fell $1.875 to $14.125.
Proxima said it would lose 25 cents to 30 cents a share in the first quarter, far below analysts' expectations of a penny-a-share profit, based on an IBES poll.
Whirlpool said swings in European currency values, coupled with sluggish sales, will damage overseas earnings. European earnings in the second quarter might fall about $50 million below Whirlpool's projections, it said. Its stock retreated 87.5 cents to $55.375.
America Online Inc. tumbled $5.375 to $47.625 as analysts cut earnings estimates for the online service. Merrill Lynch said CompuServe Corp.'s decision to join forces with Microsoft Corp. to deliver its rival service via Windows 95 puts CompuServe on an even footing with America Online.
Shares of drugmakers Cephalon Corp and Chiron Inc. fell after Smith Barney repeated concern that the two companies' drug for treating Lou Gherig's disease may be rejected by a Food and Drug Administration advisory panel Friday. Cephalon shares fell
$3.6875 to $23 and Chiron fell $5.875 to $97.875.
Pub Date: 6/06/96