NEW YORK — NEW YORK -- U.S. stocks rose in a topsy-turvy session yesterday, apparently lifted by unexpectedly strong earnings from Microsoft Corp. Yesterday's gains capped the Dow Jones industrial average's best week since December 1991.
"Companies are delivering," said Philip Schettewi, a money manager at Loomis, Sayles & Co., which oversees $51 billion. "There are no huge disappointments."
The Dow industrial average rose 44.95 to 6,703.55, after surrendering most of its earlier gains, then reclaiming them. For the week, the Dow gained 311.86 points, or 4.9 percent.
Philip Morris Cos. gained the most in the 30-stock Dow average, up $2.625 to $44.25. The world's largest tobacco company gained after Sanford C. Bernstein & Co. analyst Gary Black said the tobacco industry, the Clinton administration and tobacco opponents could announce a legislative settlement of smoking-related lawsuits within four weeks.
Helping to lead the Dow higher were Merck & Co., General Electric Co., Eastman Kodak Co. and Coca-Cola Co., all of which recently reported earnings that met or exceeded expectations.
The Standard & Poor's 500 index gained 4.57, to 766.34. The Nasdaq composite index gained 5.50, to 1,222.57. About three stocks gained for every two that fell on the New York Stock Exchange. About 468 million shares changed hands, below the three-month daily average of 501 million.
On the broader market, the Russell 2,000 index of small capitalization stocks gained 1.31 to 341.74; the Wilshire 5,000 index rose 35.90 to 7,269.47; the American Stock Exchange composite index edged up .49 to 556.01; and the S&P; mid-cap index slid .07 to 251.92.
Microsoft, the world's largest independent software company, rose $9.50, or 9.7 percent, to $107.625, an all-time high. It was the most active stock in U.S. markets -- 29 million shares traded. The Redmond, Wash.-based company reported fiscal third-quarter net income of 79 cents a share after the close of trading Thursday, 16 cents ahead of expectations. Revenue rose 45 percent.
"Microsoft is a bellwether technology company," said Greg Place, senior listed trader at Rodman & Renshaw Inc. "These earnings say the turnaround in technology is complete."
Still, many computer-related shares declined yesterday. EMC Corp., a maker of information storage products, slid 62.5 cents, to $34.375, after reporting first-quarter profit that only matched analyst expectations.
Of the 220 of the S&P; 500 companies that have reported earnings, 75 percent have met or exceeded Wall Street estimates. One year ago, 67 percent met or beat estimates.
Philip Morris rose as much as $3.625, then pared gains after the attorney general of Connecticut said tobacco companies may pay more than $300 billion over 25 years to settle health-related lawsuits. The attorney general, Richard Blumenthal, is involved in negotiations with tobacco opponents.
Investors say interest rate anxieties continue to depress stocks. Although the yield on the benchmark 30-year Treasury bond fell 2 basis points yesterday, and declined 12 basis points this week, it remains above the psychologically important 7 percent level.
AirTouch Communications Inc. rose $1, to $24.50, after it said it will pay $5 billion in stock and debt for U S West Media Group's U.S. wireless unit. U S West Media Group rose 37.5 cents, to $17.625.
Pub Date: 4/19/97