NEW YORK -- Stocks gained yesterday as rising earnings from J. P. Morgan & Co., Travelers Group Inc. and Donaldson, Lufkin & Jenrette Inc. boosted optimism that third-quarter reports will fuel higher share prices.
The Dow Jones industrial average climbed 27.01 points to 8,072.22, led by J. P. Morgan. The 30-stock average was closing in on 6,000 a year ago.
The Standard & Poor's 500 index rose 1.12 to 968.10, and the Nasdaq composite index gained 3.09 to 1,742.12.
Among other broad market indexes, the Russell 2,000 index of small capitalization stocks added 0.18 to a record 465.21; the Wilshire 5,000 index of stocks on the New York, American and Nasdaq stock exchanges climbed 12.46 to 9,396.86; the American Stock Exchange composite index slipped 0.80 to 716.57; and the S&P; 400 midcap index gained 0.58 to 339.84.
Stock investors had no guidance on the direction of interest rates, because the bond market was closed for Columbus Day.
J. P. Morgan gained $1.6875 to $120.375, even after the bank's 43 percent jump in earnings fell a penny short of analysts' estimates of $1.97 a share. Analysts said investors were reacting to the 24 percent increase in total revenue, to $1.95 billion.
Travelers rose 81.25 cents to $75.3125, helping both the Dow industrials and S&P; 500 advance. The insurance and financial services company, which owns Smith Barney Inc. and last month agreed to acquire Salomon Inc., reported a third-quarter profit from operations of $1.12 a share. Analysts expected 94 cents.
DLJ, the fourth biggest underwriter of stocks through the first nine months of 1997, rose 50 cents to $76. The firm's profit more than doubled to a record $120.3 million, or $1.80 a share. Analysts expected DLJ to earn $1.28 a share.
Advancers outnumbered decliners on the New York Stock Exchange 1,512 to 1,334. About 357 million shares changed hands on the Big Board, two-thirds of the recent daily average.
A week into the earnings season, companies on average have topped expectations. Of the 68 companies in the S&P; 500 to report profits, 37, or 55 percent, exceeded forecasts. Seventeen companies, or 25 percent, fell short and the rest were in line.
Greenfield Industries Inc. surged $5.3125 to $37.50 after Kennametal Inc. said it will buy the No. 1 drill-bit maker for about $1 billion in cash and assumed debt. The acquisition price of $38 a share was an 18 percent premium over Greenfield's closing price Friday. Kennametal fell 87.5 cents to $51.5625.
B.A.T Industries PLC's American depositary receipts jumped $1.8125 to $20 after Zurich Insurance Co. said it's in talks with B.A.T to create a financial services company valued at 22 billion pounds ($35.6 billion).
Auto shares rose for a third day, amid optimism that profitability will pick up in the fourth quarter and into 1998.
On Friday, Chrysler Corp. said third-quarter earnings fell 37 percent, still better than analysts expected.
General Motors Corp., which will report third-quarter earnings before trading opens tomorrow, rose $1.4375 to $71.4375. Ford Motor Co. jumped 62.5 cents to $49.875 and Chrysler gained 75 cents to $36.125.
Neoprobe Corp. dropped $1.75 to $12 after the company ended a marketing agreement with U.S. Surgical Corp. In September 1996, U.S. Surgical agreed to sell a Neoprobe system for detecting colorectal cancer.
Checkfree Corp. fell $1.875 to $27.875 after Patrick Burton, an analyst at Lehman Brothers Inc., cut the firm's investment recommendation to "outperform" from "buy."
Checkfree's stock had rallied 38 percent in the previous three sessions after Chase Manhattan Corp. said it planned to use the company's technology to let customers pay bills over the Internet.
Pub Date: 10/14/97