Dow climbs to 5,969.38 1st increase this week; Inflation report reinforces view that Fed won't raise interest rates very soon

THE BALTIMORE SUN

NEW YORK -- U.S. stocks rose yesterday for the first time this week as a government report reinforced a perception that the economy's strength isn't enough to force the Federal Reserve to raise interest rates anytime soon.

The Dow industrials climbed 47.71 to 5,969.38, helping the 100-year-old average regain 67 percent of the week's losses. General Electric Co., International Business Machines Corp. and DuPont Co. led the 30-stock index's advance.

Earnings are expected to drive the U.S. stock market in coming days. Chrysler Corp., General Motors Corp. and Caterpillar Inc. all are expected to report third-quarter earnings, along with numerous bank stocks.

Bank and other financial-service stocks that move higher when interest rates decline were among yesterday's biggest gainers. Computer and telecommunications equipment shares also rose, after Seagate Technology Inc. and Ascend Communications Inc. reported unexpectedly strong earnings.

Intel Corp. surged $5.50 to $105.375 after Morgan Stanley Group Inc. raised its investment opinion on the chip maker to "strong buy."

Yields on the benchmark 30-year Treasury bond fell to 6.84 percent from 6.88 percent Thursday.

Among broad market indexes, the Standard & Poor's 500 index, representing 75 percent of the value of U.S. stocks, climbed 6.05 to 700.66, and the Nasdaq composite index rose 11.30 to 1,248.27.

For the week, the Dow average fell 0.39 percent; the S&P; 500 fell 0.11 and the Nasdaq gained 0.04 percent.

The Russell 2,000 index of small capitalization stocks rose 1.25 to 347.89; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock markets, gained 49.72 to 6,866.28; the American Stock Exchange market value index rose 0.42 to 580.41; and the S&P; 400 midcap index rose 1.41 to 244.20.

The Russell 2,000 lost 0.04 percent for the week and the Wilshire 5,000 lost 0.02 percent.

vTC Barnett Banks Inc. rose $1.75 to $37.50, an all-time high; First Chicago NBD Corp. rose 62.5 cents to $46.125; PNC Bank Corp. gained 25 cents to $34.25; Suntrust Banks Inc. gained 87.5 cents to $43.25; and Banc One Corp. advanced 37.5 cents to $41.125.

The market further benefited from a rise in computer-industry stocks after better-than-expected earnings reports from Seagate, Ascend Communications and others.

Ascend rose $1 to $65.375 and was the sixth most actively traded stock on U.S. exchanges. The company's third-quarter earnings quadrupled amid greater demand for telecommunications equipment.

Seagate, the world's largest independent disk-drive maker, said net income rose to $129.4 million from $120.9 million in the year-ago quarter. Seagate reported per-share earnings of $1.11, better than the $1.07 forecast. Its shares rose $3.125 to $67.50.

C-Cube Microsystems Inc. fell $1.125 to $45.75 after the maker of video chips reported a third-quarter loss because of a charge for its acquisition of Divicom Inc. and analysts cut their profit estimates for the company.

While Cascade Communications Corp.'s third-quarter profit tripled, the stock tumbled $15.125 to $71.375 because revenue was unexpectedly weak, analysts said.

Semiconductor stocks rallied in tandem with Intel. Motorola Corp. rose 50 cents to $48.75. Applied Materials Inc. rose 37.5 cents to $29.75.

Pharmacia & Upjohn Inc. slumped $5.25 to $36.25 after disclosing that third-quarter earnings per share would fall 20 percent below analysts' expectations. The Swedish-American drugmaker blamed sluggish U.S. sales and unfavorable currency translations from the Japanese yen and the Italian lira.

Abbott Laboratories stock rose $1.50 to $50.375 after the drug and health-care supplies maker said it plans to buy back as many as 20 million shares, or about 2.6 percent of its shares outstanding.

Pub Date: 10/12/96

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