NEW YORK -- U.S. stocks jumped yesterday as bonds rose and optimism reigned for corporate profits.
Oil, telephone and computer companies all gained. The Dow Jones industrial average rose 50.97 to 7136.62, snapping back from Wednesday's 140-point swoon. Computer-guided "sell" programs in the last half-hour cut the Dow's gains by half.
International Business Machines Corp. paced the advance, rising to $167.375.
The Standard & Poor's 500 index rose 4.66 to 820.28, as Exxon Corp., Wal-Mart Stores, Intel Corp. and IBM contributed most to the rally.
The Nasdaq composite index gained 7.92 to 1,330.83.
On the broader market, the Russell 2,000 index of small capitalization stocks slid 0.12 to 360.10; the Wilshire 5,000 index added 38.43 to 7,745.41; the American Stock Exchange composite index climbed 0.45 to 570.95; and the S&P; mid-cap index rose 1.07 to 267.25.
Bonds led stocks higher for most of the day. The yield on the benchmark 30-year Treasury bond fell 3 basis points to 6.93 percent after the government reported a surprisingly high number of unemployment claims in the past week, suggesting that the economy will slow enough to keep inflation at bay.
Trading was higher than average at 534 million shares on the New York Stock Exchange, where 14 shares rose for every 11 that fell.
IBM surged a day after giving its annual review and outlook to investors and analysts. Merrill Lynch & Co. reiterated its expectation that IBM shares will reach 195 in the next 12 months. IBM also bought the 30 percent of Advantis it didn't own for $450 million, expanding its networking service business.
Top chip maker Intel rose $2.875 to $158.75, and Microsoft Corp., the world's largest software publisher, added $1 to $116.50. Networker Cisco Systems Inc. gained $2.625 to $61.375, its second straight gain after reporting earnings that met the forecasts.
Regional telephone companies gained a day after the Federal Communications Commission approved new rules that will increase costs for businesses and Internet companies. SBC Communications Inc. led the pack, rising $1.25 to $56.50. Nynex Corp. rose 62 1/2 cents to $52.75, and U.S. West Corp. gained 50 cents to $34.75.
Oil shares rallied with the price of crude. Texaco Inc. rose $4.375 to $110.625. Oil driller Reading & Bates Corp. rose $1.375 to $23.
Shares of USA Detergents Inc. fell 75 cents to $10.625 after the company reported a surprising first-quarter loss of $4.19 million, or 30 cents a share, down from a profit of 16 cents a share in the corresponding quarter a year earlier. The company also said it is negotiating a waiver from its loan agreement and is seeking additional credit.
News Corp. of Australia said profits rose 34 percent, sent aloft by the successful re-release of the 'Star Wars' movie trilogy. Its shares were up 12.5 cents to $18.625.
Japan's Sony Corp. said its video-game PlayStation and digital video cameras boosted its profit to an all-time high of $1.12 billion. Sony shares rose $3 to $80.50.
GranCare Inc. which provides long-term health care, agreed to merge with Living Centers of America Inc. in a $1.7 billion transaction. GranCare shares rose $1 to $8.75.
Pub Date: 5/09/97