NEW YORK -- U.S. stocks rose to records yesterday, sending the Standard & Poor's 500 index above 700 for the first time, as an unexpected drop in employment sent bond yields tumbling. Bank and telephone shares paced the advance.
The Dow Jones industrial average rose 60.01 to 5,992.86, nearing the milestone 6,000 mark. The government's report that the economy lost 40,000 jobs last month eased concern that the Federal Reserve would raise key interest rates to stop the economy from overheating.
The S&P; 500 Index rose 8.68 to a record 701.46, extending its gain for the year to 13.9 percent. The index, which crossed 600 on Nov. 17, 1995, gained 2.2 percent for the week, the Dow industrials 2.0 percent. Shares of General Electric Co., Coca- Cola Co. and Exxon Corp. led the advance.
A decline in Aluminum Co. of America's share price kept the Dow from getting closer to 6,000. The world's largest aluminum company said third-quarter profits from operations tumbled 42 percent as metal prices slumped. The stock fell to $57.125 before finishing at $60, down 37.5 cents.
The Nasdaq composite index, home to a slew of computer, semiconductor and software shares, gained 14.47 to 1,247.56. The index's record, 1249.14, was set June 5. Intel Corp. rose $2.1875 to $101.6875, and has now gained an average of 57 percent a year for the past five years. The last time the company announced a stock split -- on April 27, 1995 -- the shares traded at $101.50.
The Russell 2,000 index of small capitalization stocks rose 2.06 to 349.3; the Wilshire 5,000 Index, comprising stocks on the New York, American and Nasdaq stock exchanges, jumped 74.1 to a record 6,885.59; the American Stock Exchange market value index climbed 7.29 to 579.89; and the S&P; 400 midcap index rose 2.61 to a record 245.68.
Among the day's most active stocks was Raytheon Co., which fell $4 to $49 in trading of 4.89 million shares. The company said third-quarter earnings will be down about 15 percent from last year, largely because of contract delays in its engineering and construction unit and weak appliance sales.
Advancing stocks topped decliners 1,803 to 726 on the New York Stock Exchange, where 463.94 million shares changed hands. The three-month daily average on the Big Board is 381.45 million shares.
The benchmark 30-year Treasury bond's yield fell 9 basis points to 6.74 percent, its lowest since Aug. 12. Economists had expected the economy to add 170,000 jobs.
Among bank shares that rose to records, Wells Fargo & Co. jumped $2.375 to $263.375; BankAmerica Corp. climbed $1.75 to $86.25; Chase Manhattan Corp. gained 87.5 cents to $81.75; and Mellon Bank Corp. rocketed $3.875 to $64.625. NationsBank Corp. didn't set a record, but added $1 to $88.625.
Brokerage stocks gained as stocks surged to records and bond prices soared. Morgan Stanley & Co. rose $1.875 to $52; Merrill Lynch & Co. gained $2 to a record $70.75; and Salomon Inc. added 62.5 cents to $47.375.
Metzler Group Inc.'s stock soared $4 to $20 after selling 3.5 million shares in an initial public offering. Metzler provides consulting to energy companies.
More stocks rose than fell yesterday.
Telephone shares gained as the falling bond yields made the companies' big dividends more attractive. BellSouth Corp. rose 50 cents to $38.875; GTE Corp. gained 87.5 cents to $40.75; Ameritech Corp. spurted $1.75 to $55.375; US West Inc. added 37.5 cents to $31.125; Nynex Corp. gained 25 cents to $45.50; and Bell Atlantic Corp. rose 25 cents to $61.875.
KinderCare Learning Centers Inc. jumped $3.50 to $19.75 after Kohlberg Kravis Roberts & Co. said it agreed to acquire the nation's largest child-care company for $597 million in cash.
Pub Date: 10/05/96