Surging stocks pierce 5,900 Dow industrials close 50 points higher, at 5,889

NEW YORK — NEW YORK -- U.S. stocks rallied yesterday, topping records set Friday as low inflation and continued economic strength encouraged optimism for corporate profits in 1997.

The Dow Jones industrial average jumped the 5,900-point bar yesterday, one session after surpassing 5,800 for the first time, then ended the session at 5,889.20, up 50.68.


Investors favored stocks that can best profit from a faster pace of economic growth, such as Dow index-staple International Paper, up $1.625 to $43.25. United Technologies, ahead $3.25 to $121, made a second straight best-ever close.

On the broad market, the Russell 2,000 index of small capitalization stocks gained 1.50 to 342.29; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, jumped 31.52 to 6,702.63; the American Stock Exchange market value index rose .68 to 570.94; and the S&P; mid-cap index climbed .99 to 238.76.


Trading on the New York Stock exchange was active at 430 million shares, down from Friday's 488 million, which was the heaviest in two months. Advancing shares outnumbered those that declined 1,397 to 988 on the NYSE.

Nike Inc. jumped after the sports apparel maker said orders for delivery between September and January rose 66 percent to a record $3.5 billion, and announced a 2-for-1 stock split. Its shares jumped $1.375 to a record $121.625.

Ford Motor Co. Chairman and Chief Executive Alex Trotman said he sees growth in the auto industry in 1997 similar to this year's, a pace that was surprisingly brisk in the first half. Ford closed unchanged at $32 amid concern about union contract negotiations, but a new contract was announced after the market closed.

GM rose 37 1/2 cents to $49.625 on news that it may split its GM Hughes Electronics division into three parts to sell or spin off to shareholders, the Wall Street Journal reported, citing GM insiders. General Motors Class H stock, devoted to Hughes Electronics, climbed $1 to $57.50.

Aluminum Co. of America rose $1.50 to $63.50. That helped boost the Morgan Stanley cyclical index 3.89, or 1 percent, to 378.85.

The cyclical index's counterpart, Morgan Stanley's consumer growth index, added 0.30, or 0.1 percent, to 319.96.

The Standard & Poor's 500 index rose 3.44 to 683.98, also a record. The benchmark index has risen 11 percent in 1996, compared with a 15 percent gain in the Dow industrials.

Computer-industry companies led the charge in the S&P; 500.


Hewlett-Packard Co., which makes printers and computers, rose $1.625 to $48.25. Computer chip equipment maker Applied Materials Inc. rose $1.25 to $25.75.

Microsoft Corp. and Cisco Systems Inc. paced an advance in the Nasdaq composite index, up 5.29 to 1,193.96. It has risen 13.48 percent this year, but has yet to eclipse its record top of 1,249.14 June 5.

Microsoft set its third straight record, rising 50 cents to $131.50. Cisco climbed 75 cents to $59.75, a record. Intel Corp. logged its sixth record-breaking advance, rising 50 to $88.625.

Intuit rose $2.125 to $32.25 after the maker of financial software for households and small businesses said it lost 17 cents a share, excluding acquisition charges, in the fiscal fourth quarter ending July, a penny less than the 18-cent loss expected by analysts.

In Focus Systems Inc. said its earnings would probably fall short of analysts' third-quarter estimates. The maker of computer projection screens said a shortage of parts for its systems and price cutting contributed to the shortfall. In Focus shares fell 75 cents to $14.50.

Glenayre Technologies Inc. tumbled $13.25 to $20 after it said it expects third-quarter net income to be 40 percent to 45 percent below analysts' estimates because of slowing orders and higher expenses. More than 19 million shares changed hands, making Glenayre the most active issue on U.S. exchanges.


The maker of telecommunications equipment and software was expected to earn 38 cents a share, up from the year-ago 33 cents.

Shares of Netscape Communications Corp., the maker of graphic software used to browse the World Wide Web, jumped $4.50 to $43.375.

Netcom On-Line Communication Services Inc. surged $2.75 to $18.75, after the service provider was raised to "buy" from "hold" at Montgomery Securities Inc.

Pub Date: 9/17/96