NEW YORK — NEW YORK -- U.S. stocks rose yesterday as a late-day rally in bank and telephone shares overcame a slide in computer-related issues. Eastman Kodak Co. rose to a record.
The Dow Jones industrial average rose 27.32 to 6,833.48, after dropping 38.48 earlier. The advance was led by Eastman Kodak, which rose $3.625 to $89.75 after a Donaldson, Lufkin & Jenrette Inc. analyst reiterated his "buy" rating on the stock.
The Standard & Poor's 500 index rose 2.53 to 789.26, its second straight record, after rebounding from a 3.05-point loss. The Nasdaq composite index closed 2.30 lower at 1,373.75, after earlier falling 13.24 amid concern about Cisco Systems Inc.'s earnings.
Cisco fell further in electronic trading when it reported earnings after the market closed.
The Russell 2,000 index of smaller companies fell 1.21 to 368.32; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, gained 5.89 to 7,592.64; the American Stock Exchange composite index shed 0.46 to 589.25; and the S&P; midcap index lost 0.41 to 264.26.
Shares of banks and other financial companies sparked the afternoon rebound amid optimism that Federal Reserve policy-makers would refrain from boosting interest rates at their meeting. Chase Manhattan Corp. rose $2.625 to $96.375; Citicorp gained $1 to $119.375; and BankAmerica Corp. rose $1.125 to $114.625.
The benchmark 30-year bond's yield dropped 3 basis points to 6.70 percent.
Declining stocks outnumbered those that gained by 1,297 to 1,177 on the New York Stock Exchange. Some 506 million shares on the Big Board, above the three-month average of 469 million.
Stocks were lower for most of the day because of losses in computer-related stocks triggered by concern that profits for Cisco Systems and other fast-growing network equipment makers are weakening amid increasing competition.
Cisco, which fell $1.125 to $67.125, traded as low as $64 after it reported that second-quarter profit from operations was 51 cents a share. Although the analyst consensus was for 50 cents a share, many expected earnings would be 51 cents or 52 cents.
Cisco, which has the third heaviest weighting in the Nasdaq Composite after Intel Corp. and Microsoft Corp., was expected to report earnings of 50 cents a share, a 61 percent increase from the year-earlier 31 cents.
3Com Corp., the No. 2 maker of computer networking equipment behind Cisco, fell $3.25 to $58.75, adding to a $5.125-point drop Monday. Earlier, the stock fell $6.875 as analysts reduced their earnings forecasts for the company, citing growing competition.
Xylan Corp., another maker of networking equipment, fell $6.50 to $22, an all-time low, after reporting fourth-quarter earnings that matched analysts' estimates.
Philip Morris Cos. fell 50 cents to $121.875 after a Florida judge ruled that tobacco companies won't be able to use the defense that cigarette smokers assumed the risks of smoking. Florida is suing the industry for at least $800 million to reclaim Medicaid money spent treating smokers.
AT&T; Corp. shares fell 12.5 cents to $39.25 after Monday's news that Chief Financial Officer Richard Miller resigned, marking the third departure from the nation's largest long-distance company's top ranks in the past six months.
Other telephone shares gained after Sprint Corp. said call volume, a key gauge of industry prospects, was greater than expected during the fourth quarter. Sprint rose 75 cents to $41; Nynex Corp. rose $1.50 to $52.125; and Bell Atlantic Corp. gained $1.625 to $68.625.
Colgate-Palmolive Co. shares rose $2.625 to $98.875 after the company said fourth-quarter earnings rose 48 percent, led by higher sales in Latin America.
Pub Date: 2/05/97