Tech Issues Lead Rebound in Stocks : Market Overview
Stocks recouped some of last week’s losses with a moderate rally led again by technology issues.
* Bond yields eased, as President-elect Bill Clinton’s nominee for budget director, Rep. Leon Panetta, insisted that reducing the federal budget deficit remains a priority.
* Cattle and hog futures jumped on bad-weather fears.
Stocks
Small-company stocks were back in demand, as investors tried to shake off the minor correction that hit stocks last week.
The NASDAQ composite index of mostly smaller stocks shot up 5.19 points or 0.8% to 682.40, and winners topped losers 11 to 8.
Meanwhile, the Dow Jones industrials, down 49.44 points last week, added 11.08 points to 3,262.75. The Dow was helped by a surge in ailing Eastman Kodak, which jumped 3 1/4 to 45 after it hired a new chief financial officer with a reputation for cost-cutting.
On the Big Board winners beat losers by 11 to 7, and volume was 217.91 million shares versus 263.47 million Friday.
The market rallied despite Iraq’s latest provocation against Western allies--a raid on a Kuwaiti camp.
Some traders said investors are looking ahead to fourth-quarter corporate earnings reports, which will begin to roll out in the next few weeks. With government reports increasingly pointing to renewed strength in the economy, investors are raising their expectations for profit and dividend growth this year, some experts say.
Among the market highlights:
* Technology stocks resumed their market leadership position, after the profit-taking of late last week. Intel surged 3 5/8 to 102 3/8, Compaq jumped 2 1/4 to 50 1/2, Hewlett-Packard gained 2 to 72 3/4, Motorola leaped 3 1/4 to 112 3/4 and Cisco Systems advanced 2 to 83 1/4.
* Some biotech stocks advanced on the first day of a major biotech stock conference in San Francisco. Biogen rose 2 to 45 1/4, Gensia Pharmaceuticals gained 1 3/4 to 25 3/4 and Genzyme added 1 to 44 1/2.
Some large drug stocks also bounced back somewhat from a drubbing last week. Merck gained 3/4 to 43 1/4 after saying it may buy back as much as $1 billion of its stock over time. Other gainers included Warner-Lambert, up 1/2 to 66 1/2; Pfizer, up 1/2 to 68 1/2; and Alza, up 1 5/8 to 44 3/8.
* BankAmerica bounced back 1 5/8 to 45 3/8 after sliding last week. A few analysts reiterated buy recommendations on the stock.
Other financial issues moving up included Federal National Mortgage, up 2 1/8 to 77 1/2; Household International, up 2 1/4 to 56 1/4; and Mellon, up 1/2 to 52. Mellon late in the day reported strong fourth-quarter earnings and raised its dividend 9%.
* Restaurant chain Lone Star Steakhouse gained 2 to 34 1/2. It reported quarterly earnings of 17 cents a share, versus 3 cents.
* Tandy Corp. rode a roller-coaster, trading as high as 32 1/8 but closing down 1 5/8 to 29 1/4 after deciding to spin off its manufacturing unit and overhaul its retail units, which include Radio Shack, McDuff’s and Video Concepts.
*Telmex, the Mexican phone giant, dropped 1 3/4 to 55 1/4. Traders said brokerage Wertheim Schroder continued to be a heavy seller, apparently on behalf of clients.
* Also on the downside, Teledyne lost 1 1/8 to 19 1/8 after reporting sharply lower quarterly earnings.
Overseas, share prices fell broadly on the London Stock Exchange in relatively light trading. The Financial Times 100-share average fell 25.8 points to 2,773.4.
In Frankfurt, the DAX average inched up 0.44 point to 1,531.96.
In Tokyo, the Nikkei average eased 45.14 points to 16,589.55.
Credit
Interest rates were lower across the board, shaking off last week’s worries that faster economic growth might rekindle inflation and a strong demand for money.
The 30-year Treasury bond yield fell to 7.44% from 7.47% Friday.
Also helping sentiment was talk from Rep. Panetta’s Senate confirmation hearing as President-elect Clinton’s budget director. Panetta commented that reducing the federal budget deficit remains a key Clinton concern.
Other Markets
The dollar slipped in value, despite growing U.S.-Iraq tensions. It was quoted at 125.15 Japanese yen late in New York, down from 125.35 Friday. It also fell to 1.633 German marks from 1.647.
Elsewhere, cattle and hog futures prices rose sharply on the Chicago Mercantile Exchange as harsh winter weather posed new threats to livestock production and the movement of animals.
Live cattle for February delivery surged 1.32 cents to 80.52 cents a pound; February live hogs leaped the permitted daily limit of 1.50 cents to 44.65 cents a pound.
On New York’s Comex, gold for February fell $1.70 to $327.80 an ounce and March silver sank 2 cents to $3.67.
Oil futures ended lower on the New York Merc. Light, sweet crude for February fell 10 cents to $18.78 a barrel.
Market Roundup, D8
