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Dow Up on Quarter's Encouraging Reports

October 15, 1998|From Times Wire Services

A sharper advance fizzled, but stocks resumed their rebound Wednesday as the early rush of company reports on the third quarter remained encouraging.

The Dow Jones industrial average swung from an early 60-point drop to a 110-point gain, but finished just 30.64 points higher at 7,968.78 after a late pullback.

The late retreat "was a little disappointing, but the overall tone is better," said Gregory Nie, technical analyst at Everen Securities in Chicago, noting that the Dow's latest failure to hold above 8,000 "didn't spark selling as aggressively as in the past. Getting in and staying up over 8,000 has been the hard part."

Bond prices rose for a second day as a weaker-than-expected retail sales report suggested the economy is losing steam, reinforcing expectations of another Federal Reserve interest rate cut. The 30-year Treasury bond yield fell to 5.00%, from 5.09% on Tuesday.

Broader stock indexes fared better than the Dow. The Nasdaq composite rose 31.52 points to 1,540.97 as leading technology names continued to meet or beat Wall Street's skeptical profit projections.

Intel topped forecasts by a wide margin with late Tuesday's report on the third quarter, but the chip maker wasn't quite enthusiastic about the current quarter and its shares slipped $1 to $82.56 on Nasdaq.

Compaq's profit tumbled 78% compared with last year's third quarter. But Wednesday's report was in line with Wall Street's expectations and the stock rose $1 to $25.50.

For a second straight day, the outlook for the financial group grew more dubious as BankAmerica joined Merrill Lynch in failing to satisfy what were already deflated hopes.

BankAmerica fell $5.88 to $48.06 after reporting profit fell 78% because of merger costs and trading losses in stormy markets around the world.

Elsewhere on the earnings front, Ford Motor rose $1.75 to $45.81 and Pfizer rose $8.50 to $96 after those firms exceeded expectations.

Advancing issues outnumbered decliners by a 3-2 margin on the New York Stock Exchange.

The Standard & Poor's 500 index rose 10.73 points to 1,005.53, and the NYSE composite index rose 4.84 points to 496.98. The American Stock Exchange composite index rose 5.15 points to 583.01, and the Russell 2,000 index of smaller companies rose 4.65 points to 324.98.

Among Wednesday's highlights:

* Financial services companies, many of which lost about half their value in recent months, boosted the S&P 500. Citigroup gained 81 cents to $35.63, American Express gained $2.38 to $80.88 and Fannie Mae rallied $1.81 to $64.

* Microsoft gained $3.75 to $100.19, and Compaq rose $1 to $25.50 after it reported that quarterly earnings fell less than expected as it pared inventory. Apple fell $1.38 to $37.38 after the computer maker reported profit of 68 cents a share, 19 cents better than forecasts.

* Splash Technology Holdings fell $6.06, or 46%, to $7.06 as the printer maker said third-quarter earnings fell after a decline in sales to recession-hit Japan.

* PepsiCo fell $1.25 to $30.75 as the beverage and snack-food company said third-quarter profit before a gain was lower than expected.

Overseas, Tokyo's Nikkei average fell 1.3%, Frankfurt's DAX index rose 1.0%, London's FTSE-100 rose 1.0% and Paris' CAC-40 rose 2.5%.


Market Roundup, C10

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