NEW YORK -- U.S. stocks rose yesterday, led by semiconductor and oil shares, amid optimism that those companies' earnings will increase the most in the face of higher interest rates.
Intel Corp. and Exxon Corp. paced the advance, one day after the Federal Reserve raised borrowing rates to keep inflation at bay. Demand for gasoline and computers probably won't suffer, even if spending by consumers and businesses begins to slow as expected, investors said.
The Dow Jones industrial average rose 4.53 to 6,880.70. Even with the gain, the 30-stock average is down about 200 points from its record 7,085.16 on March 11.
Among yesterday's advancers, International Business Machines Corp. jumped $4.50 to $140.375 and Eastman Kodak Co. rose $1.125 to $78.25.
Exxon rose $3.625 to $109.375 after announcing yesterday that it will increase the number of shares it repurchases. The nation's largest oil company didn't place a value on the buyback or set a schedule for doing so.
Among other oil producers, Royal Dutch Petroleum Co. rallied $2.375 to $177.875; Texaco Inc. rose $1.375 to $109.75; Amerada Hess Corp. climbed 87.5 cents to $54.625; and Chevron Corp. rose 50 cents to $72.125.
Paced by the gain in computer-related stocks, the Nasdaq composite index rallied 21.02, or 1.7 percent, to 1,269.08, its biggest gain since Feb. 12. The Standard & Poor's 500 index rose 1.43 to 790.50. Though down from a high of 816.29 on Feb. 18, the index is still up 6.7 percent for the year.
Broad market indexes gained. The Russell 2,000 index of small capitalization stocks rose 1.61 to 352.31; the Wilshire 5,000 index rallied 20.07 to 7,517.39; the American Stock Exchange composite index lost 3.,09 to $583.07; and the S&P; 400 mid-cap index rose 1.07 to 261.42.
Yesterday's most active stock in U.S. composite trading were Cisco Systems Inc., Intel, Iomega Corp., Microsoft Corp. and Paging Network Inc.
Intel climbed $7.375 to $140.625 after analyst Andrew Neff at Bear, Stearns & Co. told clients that chip demand has picked up, and companies that make specialty chips are well-positioned to take advantage of rising orders.
Cisco, a computer networking company, is down 30 percent from its record high on Jan. 21; Intel has fallen 15 percent since the beginning of February.
The Philadelphia semiconductor index surged 14.96, or 5.6 percent, to 279.93, its biggest one-day leap since Feb. 12. Linear Technology Corp. rose $1.125 to $46.75; Texas Instruments Inc. gained $3.875 to $81.125; Microsoft rose $3.9375 to $94.25; and Motorola Inc. surged $2.125 to $60.50.
Gold issues gained on reports that Bre-X Mineral Ltd.'s Indonesian gold find might be a flash in the pan. Newmont Mining Corp. rose $1.50 to $41.375, and Santa Fe Pacific Gold Corp. gained 62.5 cents to $17.875.
Some 1,314 stocks rose and 1,183 fell on the New York Stock Exchange, only the second time in the last seven sessions when advancers beat decliners. More than 506 million shares traded, above the three-month average of 498 million.
Citicorp slid $2.125 to $113.625; BankAmerica Corp. dropped $2.75 to $109.25; NationsBank Corp. fell $1.25 to $59.75; Chase Manhattan slumped $1.875 to $99.875; Banc One Corp. dropped $1 to $42.75; First Union Corp. fell $1.625 to $87.125; PNC Bank fell 75 cents to $43.125; and J. P. Morgan dropped 87 1/2 cents to $105.50.
The yield on the benchmark 30-year Treasury bond rose 2 basis points to 6.98 percent, near its highest level since late September.
Foodbrands America Inc. shares rallied $7.375 to $23.125 after IBP Inc. said it will acquire the company for $23.40 a share in cash, representing a 49 percent premium to Foodbrands' closing price of $15.75 Tuesday. IBP rose 50 cents to $25.50.
Acres Gaming Inc. fell $2.875 to $4.75 after the company said it would report a fiscal third-quarter loss.
Pub Date: 3/27/97