NEW YORK -- The stock market's record-setting advance yesterday swept up a broad range of industries, with drugs, banks, health care, oil and computer-related shares in the fore. Corporation-shaking news was scant.
As the Dow Jones industrial average passed the 7,000-point milestone to close at 7,022.44, advancing shares outnumbered those that declined by 2-to-1 on the New York Stock Exchange. About 594 million shares changed hands, above the average 479 million during the past three months.
Oil shares rose after Royal Dutch Petroleum Co. announced surprisingly strong fourth-quarter earnings, spurring investors to snap up its New York registered shares.
Royal Dutch jumped $3.75 to a record $183. Mobil Corp. rose $1.375 to $131.625. And Dow member Exxon Corp. rose $1 to $104.
Among drug shares, Merck rose $3.75 to $99.625, and Pfizer Inc. gained $2.375 to $96.
Investors said companies with the greatest international presence, such as drugmakers and oil explorers, will continue to see their profits rise by more than 10 percent. That's about double the 5.5 percent growth rate for an average company in the S&P; 500 index last year, according to Bloomberg Analytics.
"You have to go abroad to get the growth," said Vernon Winters, chief investment officer at Mellon Private Asset Management. "The big companies are better positioned to do that."
U.S. stocks are in the midst of their longest-ever bull market, defined as a period when the Dow industrials rise without giving up 20 percent of their value. The Dow average hasn't dropped even 10 percent since Oct. 11, 1990, the starting date for this decade's bull market. The average has almost tripled in that time.
Surging bonds contributed to the stock market's rally late in the day. The yield on the benchmark 30-year Treasury bond, which moves opposite its price, fell 7 basis points to 6.64 percent. The final part of the government's quarterly sale of 30-year Treasury bonds met strong demand.
Banks rallied as their vast bond holdings appreciated, and lower interest rates were seen boosting new loans. NationsBank Corp. jumped $2.50 to $117.75, an all-time high. Wells Fargo & Co. gained $4.875 to $316.875, also a record.
Merrill Lynch jumped $8.50 to $96.50, a record close, after Goldman, Sachs & Co. recommended buying the shares of the broker and investment bank.
Compaq Computer Corp. and Dell Computer Corp., among the top makers of personal computers, gained. Compaq rose $1.50 to $83.50 and Dell advanced $3.5625 to $70.25.
USLife Corp. jumped $5.25 to $47 after American General Corp. agreed to buy its fellow life insurer for $1.8 billion in stock, or $49 a share, and assume $600 million of the company's debt. American General rose 37.5 cents to $41.875.
Galileo Corp. shares tumbled $11.75, or 63 percent, to $6.875 after the maker of copier parts said its biggest customer, Xerox Corp., has decided to make the parts itself to cut costs.
PictureTel Corp. shares fell as much as 16 percent after the maker of videoconferencing systems said sales in the first quarter will fall below levels seen at the end of last year. Its shares dropped $2.6875 to $15.875.
Options of Staples Inc. and Office Depot Inc. were the most active in U.S. markets as concern arose that their proposed merger would take longer than expected to get federal approval. Investors who had speculated that the merger would be completed by March swapped contracts expiring that month for ones expiring in April.
The Federal Trade Commission is considering a challenge to the merger of the biggest U.S. office supply retailers unless they can convince antitrust enforcers that the resulting dominant chain wouldn't raise prices charged to consumers.
"This is people moving to a later date because of the delay," said Michael Schwartz, a senior options strategist at Oppenheimer & Co.
Staples shares rose 93.75 cents to $20.9375 and Office Depot's fell 37.5 cents to $19.25 as investors speculated that, of the two chains, Staples would end up better off if the planned merger fails.
Overseas markets were higher.
In Japan, stocks rose 1.51 percent to 18,688.06.
In London, the FT-SE 100 gained 0.53 percent to a record 4,327.10, helped by Royal Dutch/Shell Group.
"Inflation is still under control, tech stocks are starting to rebound, markets are up overseas, and it's sunny in New York," said Ken Ducey, head trader at BT Brokerage in New York. "What more could you want?"
Pub Date: 2/14/97