NEW YORK -- U.S. stocks rose yesterday for a third day, as a brighter outlook for profits lured investors back into the market after a six-week slump.
Financial shares gained after a $34 billion merger agreement between Wells Fargo & Co. and Norwest Corp.
Friday's report on the U.S. labor market, which showed a growing economy with no inflation, reassured investors that profits would grow fast enough to keep stocks moving higher.
The Dow Jones industrial average rose 31.89 to 9,069.60, adding to Friday's 167-point gain. The Dow is still 142 points below its mid-May record.
The Standard & Poor's 500 index rose 1.86 to 1,115.72.
The Nasdaq composite index climbed 4.85 to 1,787.77.
Among other broad market indexes, the Russell 2,000 index of small capitalization stocks rose 2.10 to 456.34; the Wilshire 5,000 index gained 28.11 to 10,501.06; the American Stock Exchange composite index climbed .57 to 713.69; and the S&P; 400 midcap index added 1.20 to 360.86.
The Bloomberg Maryland index, which tracks the top 100 stocks in Maryland by market valuation, rose 1.14 to 231.08.
Expectations for more mergers boosted shares of several financial companies after Wells Fargo and Norwest agreed to combine, attempting to better compete with BankAmerica Corp. and other rivals that are building nationwide franchises.
Minneapolis-based Norwest fell $2.875 to $36.8125. Wells Fargo rose $2.50 to $365.75.
BankBoston Corp. gained $.875 to $10 and Mellon Bank Corp. rose $.25 to $9 on expectations that they, too, will be acquired or merge, analysts said.
American Express Co. was the Dow's biggest gainer, rising $4.50 to $109.
Paine Webber Group Inc. rose $2.75 to $45.1875 after people familiar with the brokerage said it held exploratory merger talks with Prudential Securities.
Oil shares declined.
Royal Dutch Petroleum Co. fell $1.875 to $56.125; Texaco Corp. lost $1.375 to $58.25; and Chevron Corp. lost $1.50 to $81.
Oil service shares also slumped. Schlumberger Ltd. fell $2.25 to $76.875 and Baker Hughes Inc. lost $1.25 to $36.50.
Intel Corp. fell 50 cents to $69.3125 after the Federal Trade Commission, as expected, accused it of unfairly competing in the microchip market by threatening to withhold vital information from rivals to obtain patent rights to their technology.
Texas Instruments Inc. gained $2.6875 to $53.50 after the New York Times reported that the maker of computer chips is in talks to sell its dynamic random-access memory chip business to Micron Technology Inc.
Philip Morris rose 93.75 cents to $39.5625 after analysts at Goldman, Sachs & Co. and Credit Suisse First Boston advised clients to buy the stock.
The maker of Marlboro cigarettes rallied 6.5 percent Friday after U.S. Senate Majority Leader Trent Lott said the comprehensive anti-tobacco bill is "dead."
American depositary receipts of B.A.T Industries PLC, owner of Kool cigarettes maker Brown & Williamson, 68.75 cents to $20.3125. Smokeless tobacco maker UST Inc. fell 18.75 cents to $26.5625.
Nabisco Holdings Corp. tumbled $6.0625 to $39.875 after the biggest U.S. cookie and cracker maker said it will take a second- quarter charge of about $268 million, or three times estimated earnings, to fire workers and shut plants.
RJR Nabisco Holdings Corp., which owns 80.5 percent of the company, also declined, falling $1.625 to $26.50.
Advancing issues led decliners by a ratio of 4 to 3 on the New York Stock Exchange. About 543 million shares changed hands, below the three-month daily average of 607 million.
The most active stocks in U.S. trading yesterday were Intel, Novell Inc., Philip Morris and Dell Computer Corp.
Pub Date: 6/09/98