Optimism sends market upward Sales of new homes, durable goods give cyclical stocks a lift

NEW YORK — NEW YORK -- U.S. stocks rose yesterday, and the Standard & Poor's 500 index reached its first record in seven sessions, as the best new home sales in a decade spurred optimism that companies can prosper even with higher interest rates.

Computer-guided sell orders prompted a late decline, which was exaggerated as money managers who mimic the performance of the S&P; 500 Index sold shares to make room for Lucent Technologies Inc. The communications company, spun off from AT&T; Corp., was being added to the benchmark index after the close of trading yesterday.


The Dow Jones industrial average rose more than 34 points before paring gains to 5882.17, up 9.25. Companies positioned to benefit most from faster economic growth, such as AlliedSignal Inc. and Caterpillar Inc., paced the rally. The S&P; 500 rose 1.14, to 687.31, topping a Sept. 20 high.

Black & Decker Corp. gained $1.375, to $41.50. Handyman supplier Stanley Works rose 87.5 cents, to $28.125. Home electronics, washer and dryer retailer Sears, Roebuck and Co. rose 62.5 cents, to $44.75.


Toll Brothers Inc., a developer of single-family detached homes, rose 50 cents, to $16.625. Basset Furniture Industries Inc. gained 25 cents, to $23.75.

The Nasdaq composite index fell 3.13, to 1,226.92, after losing a 3.91-point gain. The computer industry-weighted index is about 22 points beneath its best finish.

Declining shares beat advancers by 1,306 to 1,075 on the New York Stock Exchange. Some 388.3 million shares changed hands, below the average of 402.3 million for this year.

Automakers rose after a report on consumer spending showed purchases of durable products rose 3.1 percent in August. Ford Motor Co. rose 62.5 cents, to $31.25; Chrysler Corp.'s shares rose 50 cents, to $28.625; and General Motors Corp. rose 75 cents, to $48.

Among Dow average stocks, crane maker Caterpillar rose $1.375, to $57.375. AlliedSignal, which makes auto parts and aerospace equipment, rose $1.25, to $65.875, a record.

The Russell 2,000 index of smaller shares rose 0.87, to 346.39; the Wilshire 5,000 index -- a broad measure of stocks listed on the American Stock Exchange, Nasdaq stock market and the NYSE -- topped its May 22 record, rising 11.32 to a record 6,765.65; the American Stock Exchange market value index jumped 3.02, to 571.49; and the S&P; midcap index lost .34, to 241.93.

Pub Date: 10/01/96