Stocks rebound late in session Dow industrials gain 41 points, to 7,808; phone, drug shares strong


NEW YORK -- U.S. stocks rose yesterday, led by telephone and drug shares, as investors were attracted by stable earnings and safe dividends in a wobbly market. BellSouth Corp. shares reached an all-time high.

Stocks rallied at the opening, lost their gains by midday and rebounded in the afternoon, as investors come to grips with how the financial market routs in Asia and the collapse of Yamaichi Securities Co., Japan's fourth-largest brokerage, will affect the United States.

"The weakness in Asia will take the edge off of domestic growth and inflation concerns, but will leave us with moderate growth and benign inflation, rather than pushing us into a recession," said Philip J. Orlando, chief investment officer at Value Line Asset Management in New York, which oversees $6.5 billion.

The Dow Jones industrial average closed up 41.03 to 7,808.95, after having jumped 53 points after the opening bell, then falling 28 points. The Standard & Poor's 500 index rose 4.15 to 950.82, led by telephone companies. The Nasdaq composite index climbed 2.06 to 1,589.05.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks slipped 0.92 to 426.91; the Wilshire 5,000 index, made up of stocks on the New York, American and Nasdaq stock exchanges, climbed 27.27 to 9,094.20; the American Stock Exchange composite index slid 1.71 to 661.80; and the S&P; 400 mid-cap index gained 0.81 to 319.71.

Advancing and declining stocks were about even on the New York Stock Exchange. More than 571 million shares changed hands.

BellSouth rose $2.125 to $55.0625; Bell Atlantic Corp. gained $2.125 to $86.6875; and Ameritech Corp. rose 87.5 cents to $76.4375.

Pfizer Inc. gained $1.5625 to $73.0625; Merck & Co. rose $1.50 to $94; and Schering-Plough Corp. gained $1.0625 to $63.4375.

The Dow Jones utilities average rose for a fifth time in seven sessions, reaching its second record in three days. The average rose 2.98 to 258.53, led by Unicom Corp., which gained $1.125 to $29.875.

Oil stocks sank on concern about lower crude prices amid rising production.

Exxon Corp. lost $1.75 to $61.125; Mobil Corp. dropped $2.4375 to $71.625; and Chevron Corp. fell $2.125 to $80.75.

Citicorp and some other big banks fell for a second day on concern that the weakness in Asian markets will reduce earnings. Sanford C. Bernstein & Co. analyst Ronald Mandle cut his rating on Citicorp to "under-perform" from "outperform" and lowered his earnings estimates on BankAmerica Corp., Bankers

Trust New York Corp., Chase Manhattan Corp. and J. P. Morgan & Co.

Citicorp lost $2.8125 to $119.25; Chase fell 56.25 cents to $109.4375; J. P. Morgan rose 50 cents to $113.4375; and BankAmerica rose $2.3125 to $75.3125.

Dell Computer Corp. rose $1.5625 to $81.3125. The direct seller of personal computers reported earning 69 cents a share in its third quarter that ended Nov. 2, above the average estimate of 65 cents.

International Business Machines Corp. rose $4.25 to $107.375 and Gateway 2000 Inc. rose 43.75 cents to $28.1875. Compaq Computer Corp. shares fell 81.25 cents to $59.1875.

Intel Corp. fell $1.6875 to $76.4375 after Morgan Stanley, Dean Witter, Discover & Co. analyst Mark Edelstone cut his 1998 earnings estimates on the world's largest maker of computer chips.

Boeing Co. rose $1.75 to $51.375 after the company said its 747 assembly line resumed full production under a plan designed to cope with a parts and labor shortage that bogged down its assembly lines.

Times Mirror Co. rose $2.50 to a record $60 after the publisher of The Sun and other newspapers said it is considering selling, spinning off or swapping its Mosby Inc. medical publishing unit and its Matthew Bender & Co. legal publishing business.

Pub Date: 11/26/97

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