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Stocks Inch Up on Solid Earnings Reports

July 23, 1994|From Times Wire Services

Stocks inched higher Friday in a quiet summer session, as the downward pressure of higher bond yields was offset by solid earnings reports.

The Dow Jones industrial average opened the session higher in tandem with bond prices, but it turned south in midmorning as bonds and the dollar lost ground. The index was nearly unchanged for most of the afternoon but sprinted into positive territory near the end of the session. The blue chip average closed at 3,735.04, up 2.59 points.

In the broader market, advancing issues edged out decliners by about 9 to 8 on the New York Stock Exchange, where 261.6 million million shares changed hands.

Broad market indexes posted modest gains. The NYSE's composite index rose 0.18 to 250.24. The Nasdaq index climbed 1.13 to 716.16.

While some issues got a boost from good earnings reports, the overall tenor was cautious about a potential increase in short-term interest rates.

Congressional testimony Friday by Federal Reserve Board Chairman Alan Greenspan did nothing to allay those fears. Greenspan reiterated comments he made Wednesday before Congress that led market officials to expect another rate increase.

"It was interesting to listen to him talk and watch bonds fall," said Trude Latimer, a stock trader at Ferguson Andrews in Charlottesville, Va.

Foreign markets were mixed. On the Frankfurt bourse, the 30-share DAX average finished 36.96 points higher at 2,150.26. London's financial Times 100-share average ended up 19.6 points at 3,114.7 after reaching a high of 3,123.3 for the day, while Mexico City's Bolsa index gained 67.85 points to close at 2,300.66.

In Tokyo, the Nikkei 225-share average ended at 20,462.89, down 160.03 points. Among the market highlights:

* McDonald's led the action on the NYSE and fell 2 to 26 1/4 after Merrill Lynch downgraded the stock.

* Steel stocks were higher after USX-US Steel reported second-quarter earnings of 65 cents a share, much higher than the 48 cents analysts had expected. USX-US Steel rose 1 3/4 to 37. Inland Steel added 1 1/8 to 38 7/8 and LTV rose 7/8 to 18 1/4.

* Apple Computer rose 3 to 31 after the company reported third-quarter net earnings of 50 cents a share, while the mean estimate was 35 cents. Microsoft rose 2 13/16, Quantum Corp. added 7/16 to 15 5/16 and Seagate Technology climbed 1 3/16 to 25 13/16.

* But IBM, which added more than 6 points Thursday, fell 1 to 61 3/8, and Compaq lost 1 1/2 to 30 5/8.

* Kellogg fell 1 1/2 to 52 1/2 after its profit failed to beat Wall Street's expectations.

* Telefonos de Mexico rose 1 1/2 to 57 on strong results.

In the bond market, the bellwether 30-year bond ended at 7.56%, up from 7.54%, while its price, which moves in the opposite direction, fell 7/32 point, or $2.19 per $1,000 in face value.

Prices of short-term Treasury securities ranged from 1/16 point to 3/32 point lower, and intermediate maturities were down 1/8 point to 7/32 point, the Telerate Inc. financial information service reported.

Trading was described as extremely light, with participants lacking a clear reason to buy or sell bonds amid a dearth of fresh economic data.

The dollar also started firmer and ended higher against the German mark but lower against the Japanese yen.

In New York, the greenback closed at 1.598 marks, up from 1.593 on Thursday. It fell to 98.90 yen, down from 99.20.

Market Roundup, D3

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