Dow 30 climb through 6,400 Caterpillar and GM lead index's 32-point gain; computers slide late

NEW YORK — NEW YORK -- U.S. stocks rose to records for the 10th time this month as gains yesterday in Caterpillar Inc. and General Motors Corp. pushed the Dow Jones Industrial Average past 6,400 for the first time.

"The two main drivers of the bull market remain intact: GDP will not accelerate; inflation and interest rates will remain stable; and corporate earnings growth will continue to surprise on the upside," said Kevin Parke, head of research at MFS Asset Management.


The Dow climbed 32.42 to 6,430.02. The average has gained 401 points, or 6.6 percent, this month.

Leading the industrials' advance, Caterpillar Inc. jumped $4.75 to $78.75 after Smith Barney analyst Tobias M. Levkovich raised his rating on the stock to "buy" from "neutral."


Stocks ended higher even though a late-day slide in computer stocks dragged Dow stalwart International Business Machines Corp. from a $4.875 gain to a $1.50 loss.

The slump came amid speculation that Soundview Financial Group, an influential brokerage house that specializes in computer-related companies, was lowering its investment opinion on the industry. Soundview said it hasn't changed its rating.

The broader Standard & Poor's 500 index rose 1.78 to a record 743.95. The benchmark index climbed to 746.99 before computer issues started falling. The Nasdaq composite index rose 2.32 to 1,264.94, after touching 1,272.46.

General Motors Corp. shares rose $2.50 to $57.125 after the company said it will eliminate more than 30,000 jobs by the end of the century. GM shares also got a boost from expectations that the company's Hughes Aircraft Co. will merge with Raytheon Co. to better compete in the defense industry, investors and analysts said. Raytheon rose $2.50 to $52.375. GM's Class H shares, which track Hughes' performance, jumped $3.875 to $53.625.

The Russell 2,000 index of small capitalization stocks rose .58 to 347.53; the Wilshire 5,000 index jumped 20.96 to 7,174.85, its second straight record this week; the American Stock Exchange market value index climbed 2.55 to 587.19; and the S&P; mid-cap index gained 1.03 to 253.60, also a record.

While the Dow and the S&P; are up more than 20 percent this year, the Russell 2,000 index, considered the best measure of small company performance, has risen just 10 percent.

Maryland stocks fell, led by Manugistics Group Inc., which dropped $3.0625, and Sylvan Learning Systems Inc., which lost $2.75 to $26.25.

Computer Associates International Inc., the world's biggest software company after Microsoft Corp., rose $3.875 to $63.875. Among networking computer companies, Oracle Corp. gained 41.75 to $47.875 and Sun Microsystems Inc. gained $2.25 to $59.25.


Microsoft, which is challenging the network companies with chip maker Intel Corp., fell $2.625 to $153.25. Intel gave up all but 12 1/2 cents of a $3.75 gain to end at $120.875.

Bank shares rose as bond yields returned to eight-month lows after rising earlier yesterday. A Treasury auction of $12.5 billion in bonds met with unexpectedly strong demand.

NationsBank Corp. rose $1.25 to $100.25; First Union Corp. Corp. gained 62 1/2 cents to $73.625; and Suntrust Banks Inc. rose 87 1/2 cents to $49.125.

The benchmark 30-year Treasury bond's yield fell 2 basis points to 6.41 percent.

Brokerage shares fell after the government unveiled a new regulatory system that makes it easier for national banks to sell securities, setting the stage for a showdown between bankers and Wall Street firms like Morgan Stanley Group Inc., which dropped $1.125 to $57.

Kmart Corp. shares fell 75 cents to $10.50 after the company reported net income of 2 cents a share, compared with a year-earlier loss of 15 cents.


Pub Date: 11/21/96