Stocks manage first gain in a week Dow index up 5 points; energy issues strong

THE BALTIMORE SUN

NEW YORK -- U.S. stocks rose yesterday for the first time in a week, led by Exxon Corp. and Schlumberger Ltd. on optimism about profits for oil exploration and service companies.

The Dow Jones industrial average rose 5.11 to 7,787.33, overcoming an 84-point drop.

About four stocks advanced for every three that fell, with 492 million shares traded -- about 94 percent of the three-month daily average. The Standard & Poor's 500 index rose 0.68 points to 913.70. The Nasdaq composite index rose 4.24 to 1,595.54.

Stocks had been falling for the past week amid concern that prices weren't justified by earnings prospects. Yesterday, they were buffeted by computer-guided "buy" and "sell" programs, traders said. Some 14 programs -- seven buys and seven sells -- boosted the Dow industrials 22.32 points, according to Birinyi Associates, a Greenwich, Conn., research firm.

Big oil companies got a boost from Deutsche Morgan Grenfell Inc. analyst Michael C. Young, who recommended increasing holdings of the stocks on the grounds that third-quarter earnings will be better than most analysts expect.

Chevron Corp. rose $1.6875 to $79.9375; Exxon Corp. gained $1.50 to $63.25; and Amoco Corp. jumped $2 to $97.125.

Offshore oil drilling contractors rose for a second day on expectations of a pickup in exploration in the Gulf of Mexico.

Global Industries Ltd. rose $5.125 to $35, and Transocean Offshore Inc. gained $4.6875 to $93.5625. Cooper Cameron Corp., which makes undersea drilling equipment, rose $2.625 to $63.50.

Earlier in the day, stocks fell as investors sold shares of some of the market's former leaders, including Procter & Gamble Co. and Coca-Cola Co., on concern that earnings will disappoint. Coke fell 37.5 cents to $58.625. Procter & Gamble fell 75 cents to $136.25.

Merck & Co. advanced $1.25 to $92.875. Among other pharmaceutical companies, Pfizer Inc. rose $1.50 to $55.375; Schering-Plough Corp. gained $1 to $48.1875; and Warner-Lambert Co. rose. 62.5 cents to $126.625.

Big stocks have been hit the hardest since stocks began declining Aug. 6. The so-called New Nifty Fifty that led the market during the last two years have dropped 6.5 percent in that time. By contrast, the Russell 2,000 index of smaller stocks has risen 0.3 percent since Aug. 6. The Russell 2000 rose 2.53 to 420.84 yesterday, its third consecutive gain. Many money managers have been recommending small stocks for months, claiming that they were poised to "outperform" larger issues. In 1996, the Russell gained 15 percent, and the S&P; rose 20 percent. The trend may have reversed. The Russell index climbed 11 percent in the past three months, compared with a 7 percent gain for the large company S&P.;

Among broad market indexes, the Wilshire 5,000 index gained 14.74 to 8,769.18 yesterday; the American Stock Exchange composite index advanced 3.82 to 651.12; and the S&P; 400 mid-cap index added 0.90 to 314.19.

Novell Inc. fell 59.375 cents to $9.375 after the networking company's chairman said Novell is not for sale. The stock rose 19 percent in the prior two days on speculation that International Business Machines Corp. might buy Novell.

Ceridian Corp. fell $5.9375 to $37.0625, after it said it will stop work on new payroll-processing software.

Chips & Technologies Inc. fell 9.375 cents to $16.96875 after it said it received a request from the Federal Trade Commission asking for additional information on its proposed $420 million acquisition by Intel Corp.

Pub Date: 8/28/97

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