NEW YORK -- U.S. stocks were mixed yesterday as rising bank and consumer issues softened the blow delivered by Union Carbide Corp., which warned of weak sales ahead.
"The market looks pretty darn good," said Howard Ward, who manages the Gabelli Growth Fund, with $880 million. "There will be periodic disappointments, but on balance I think earnings are going to be fine."
The Dow Jones industrial average fell 5.45, less than 0.1 percent, 7,917.27.
The small change at the finish masked an up-and-down performance resulting from the quarterly "triple witch" expiration stock options, index futures and options on futures.
The Dow average would have climbed almost 10 points if not for Union Carbide, which fell $4.0625 to $49.5625 and sparked a retreat among economically sensitive companies.
The Standard & Poor's 500 index rose 3.22, or 0.3 percent, to 950.51, while the Nasdaq composite index gained 10.34, or 0.6 percent, to a record 1680.36.
The Russell 2,000 index of small capitalization stocks gained 0.67 to 447.17; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq exchanges, spurted 24.40 to 9,172.69; the American Stock Exchange composite index climbed 0.14 to 686.94; and the S&P; mid-cap index rose 0.82 to 332.54.
Trading of 631 million shares on the New York Stock Exchange put yesterday's volume among the top eight of all time.
Stocks will be bolstered in coming days by the underlying soundness of the economy, said Joseph DeMarco, head trader at HSBC Asset Management in New York. "When you consider the backdrop of inflation and growth, the market still has the ability to set new highs," he said.
For the week, the Dow rose 2.3 percent, the S&P; 500 gained 2.9 percent and the Nasdaq climbed 1.9 percent.
Bonds rose amid optimism that inflation will remain dormant. The yield on the benchmark 30-year Treasury bond, which moves opposite to the price, dropped 2 basis points to 6.37 percent, down from a high of 6.68 percent last Friday.
The diminishing returns offered by bonds makes stocks such as Gillette Co. and Procter & Gamble Co., which have long histories of steady performance, look increasingly attractive.
"We're seeing a flood of money come back into the stock market," said Gabelli's Ward.
Gillette rose $3.9375 to $88.6875 yesterday after announcing it would buy back as much as 25 million shares, or more than 4 percent of the total outstanding, in the next two years. Gillette had dropped 24 percent from mid-July through the middle of last week.
Philip Orlando, chief investment strategist at Value Line Asset Management, said he used the decline in Gillette to his advantage.
"We just backed up the truck and hauled in all we could," he said.
Procter & Gamble, which slumped 16 percent during the summer, gained 50 cents to $142.75.
Drug shares, also beaten down of late, put in strong showings yesterday. Pfizer Inc. gained50 cents to $60.50, and Merck & Co. jumped $1.375 to $98.625.
Pub Date: 9/20/97