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FINANCIAL MARKETS

Blue Chips Advance as Yields Hold Steady

September 19, 1997|From Times Wire Services

U.S. stocks climbed as Whirlpool and Tektronix said they will slash their work forces, raising investor confidence that companies will do whatever it takes to boost profits.

Share prices for Whirlpool, which promised to cut 4,700 jobs and to sell its financial unit, and Tektronix, which said it will eliminate 250 jobs, were the biggest gainers for the Standard & Poor's 500 Index. They were among a host of companies this week to announce unit sales, spinoffs or share buybacks aimed at pleasing investors.

"It's the most exceptional period in U.S. capital markets since the 1920s," said F. Van Kasper, who runs an investment firm. "If you're running a corporation today and you're not getting recognition from the capital markets, you're going to do whatever you can to get with the flow."

The S&P 500 index climbed 4.29 points, or 0.5%, to 947.29.

Whirlpool was up $8.06 at $64.88. In the 18 months before, Whirlpool's shares had fallen 7.6%, while the benchmark S&P 500 jumped 44%. Stock in Tektronix, a maker of color printing and measurement equipment, rose $5 to $67.38.

The Dow Jones industrial average closed up 36.28 points at 7,922.72 after profit-taking cut into an early rally of nearly 135 points. The backup coincided with a faltering rally in bonds. The yield on bellwether 30-year Treasury bond finished unchanged at 6.39%.

Falling interest rates and companies' efforts to trim their work forces and shed units helped start this decade's bull market. Now investors are demanding that companies match those big gains in profits and shares, keeping up the pressure on corporate chiefs.

The Whirlpool and Tektronix news comes three days after Sara Lee said it will sell some of its manufacturing units to focus on brand management. The maker of cakes and apparel has watched its shares soar 16% since then. Sara Lee rose 6 cents to $49.25 on Thursday.

"Managements are really trying to find ways to increase shareholder value," said Guy Truicko, a money manager at Unity Management. "Whenever something like Sara Lee or Whirlpool pops up, I always look at it."

"The correction is being muted or stalled by the action of the bond market," said A.C. Moore, chief market strategist at Principal Financial Securities, a money-management firm.

The yield on the benchmark 30-year Treasury bond was unchanged at 6.39%. The yield has fallen 29 basis points in the last week as recent reports have shown that the economy has been continuing to grow with little inflation. Lower interest rates make borrowing cheaper and help corporate profits expand.

The Dow's biggest gainers were International Paper, up $2.19 at $58.06; Chevron, up $1.88 at $88.50; United Technologies, up $1.75 at $82.88; and Alcoa, up $1.69 at $82.81.

Advancing issues outnumbered decliners by a nearly 3-2 margin on the New York Stock Exchange, where volume, at about 576.2 million shares, continued at this week's hectic pace.

The dollar rose against the Japanese yen after an influential investment advisor was quoted as saying the exchange rate would rise to 130 yen by year-end. The article quoted the source as an advisor to renowned global financier George Soros.

The dollar hit an intraday high of 122.30 yen before backing off to 121.76 yen in late trading, up from 121 yen Wednesday. It was higher at 1.7795 German marks late Thursday, from 1.7725 marks.

The NYSE composite index rose 2.20 points to 495.41 after retreating from a 7-point gain that had put that measure above the 500 mark for the first time.

Among those measures setting new highs were the Nasdaq composite index, up 3.55 points at 1,670.02; the Russell 2,000, up 0.35 point at 446.50; and the Amex composite, up 3.80 points at 686.80.

Overseas, the Tokyo Nikkei-225 stock average rose 1.4%, the Frankfurt DAX 30 index fell 0.2% and the London FTSE-100 rose 0.7%.

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