Oil stocks lead market to another record Year's third high mark also is supported by a drop in bond yields

THE BALTIMORE SUN

NEW YORK -- U.S. stocks scored their third record of the year yesterday as investors speculated that rising energy prices will trigger a profit boom in oil companies such as Texaco Inc. and Exxon Corp.

A drop in bond yields from 11-week highs supported the rally.

The Dow Jones industrial average gained 76.19 to a peak close of 6,625.67, as Exxon climbed $3.375 to a record $102.875.

The benchmark Standard & Poor's 500 index gained 6.44 to 754.85, with oil drilling, exploration and equipment shares rising most. The Nasdaq composite index rose 5.85 to 1,326.20, less than 2 points below Tuesday's record 1,327.73.

The yield on the benchmark 30-year Treasury bond sank 9 basis points to 6.75 percent after a report on producer prices and optimistic remarks from Federal Reserve officials on inflation.

The broad rally helped the Russell 2,000 index of small-company shares rise 1.41 to 365.58; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, dropped 29.50 to 7,269.64; the American Stock Exchange composite index climbed 5.02 to 581.74; and the S&P; midcap index gained 1.68 to 259.85.

Oil firms jump

The S&P; 500's list of large U.S. oil companies recorded its biggest one-day gain in four years, jumping 4.02 percent. A barrel of oil sold for $26.36, down 26 cents from Wednesday's close, the highest price for oil since January 1991.

Unocal Corp., up $2.625 to $44.125; USX-Marathon Group, ahead $1.125 to $26.50; and Schlumberger Ltd., plus $2.875 to $110.50, were among more than a dozen energy stocks that set all-time highs.

Texaco jumped $3 to $105.

The company said after the close of trading yesterday it gave prosecutors an internal report on its handling of a race discrimination suit.

Among financial stocks, BankAmerica Corp. rose 62.5 cents to $98.375; Federal Home Loan Mortgage Corp. rose $1.25 to $113.25 and Federal National Mortgage Association rose $1.625 to $39.25.

Sales prompt warnings

Slowing sales prompted warnings from some apparel stores that profits would be below expectations. Limited Inc. said it sees 1996 net income below the average estimate of $1.17 a share in a poll by First Call. Its shares fell 87.5 cents to $16.875.

Federated Department Stores Inc. said December sales at stores open more than a year were little changed from last year's pace. The Cincinnati-based owner of Macy's and other national chains fell 37.5 cents to $31.75.

Neiman-Marcus Group shares slid $3.375 to $23.375 after the company forecast earnings of 50 cents a share in the fiscal second quarter, 7 cents below the average forecast in a poll by IBES International Inc.

Borders Group Inc. was an exception. The bookseller said its earnings will top the 1996 average forecast of $1.29. Its shares rose $2.125 to $36.875.

Kmart Corp. reported an 11.6 percent sales gain in the same period, and its shares rose 37.5 cents to $10.875.

Tobacco shares regained much of their morning losses as investors expressed skepticism about damage from negotiations by Brooke Group Ltd.'s Liggett cigarette unit to settle state lawsuits.

Philip Morris Cos. shares rose 62.5 cents to $113.375, and Loews Corp., owner of Lorillard, backtracked $1.50 to $92.25 before closing up 25 cents at $94.

Horizon/CMS Healthcare Corp. reported a profit of 14 cents a share before charges, below an expected profit of 26 cents, for its fiscal second quarter ended in November. The stock fell 25 cents to $12.25.

Other gainers

Shares of No. 1 disk-drive maker Seagate Technology Inc. rose $1.375 to $45 after topping analysts' forecasts in the quarter. Another disk-drive maker, Hutchinson Technology Inc., added $1.50 to $79.50 and Read-Rite Corp. gained 62.5 cents to $25.875.

Seagate, the world's largest maker of computer disk drives, reported that earnings jumped 43 percent in the fiscal second quarter, ahead of estimates. Per-share net income rose to 91 cents from 74 cents. Analysts expected 81 cents, on average.

Shares and options of Getchell Gold Corp. surged amid speculation the company would be bought out by Newmont Mining Corp. or Homestake Mining Co.

Getchell shares rose $3.875 to $39. Newmont rose $1.25 to $41.125 as gold rebounded from a 3-year low. Homestake gained 50 cents to $13.875.

Pub Date: 1/10/97

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