3M Earnings Pull Dow Back Above 6,000
Blue-chip stocks snapped a four-session losing streak Friday and climbed back above 6,000, bolstered by an unexpectedly strong earnings report from Minnesota Mining & Manufacturing, one of the stocks in the Dow Jones industrial average.
A rally in the bond market also lent support to stocks as long-term interest rates fell. The 30-year Treasury bond yield fell to 6.81% from 6.85% on Thursday.
Both markets recovered somewhat from early-morning losses when a report of sluggish home sales calmed inflation worries.
The Dow gained 14.54 points to 6,007.02, sneaking back over the 6,000 mark after closing below it on Thursday for the first time since Oct. 11. But the blue-chip index was still down 87.21 points for the week from its all-time closing high last Friday of 6,094.23.
Friday’s breadth was indecisive, with advancing issues squeezing by decliners on the New York Stock Exchange by fewer than 20 issues. Volume was lighter at 364.98 million shares, down from 415 million on Thursday.
Among broad-market measures, the Standard & Poor’s 500-stock index fell 1.37 points to 700.92, the NYSE’s composite index declined 0.52 point to 373.26, the Nasdaq composite index fell 4.40 points to 1,222.60, and the American Stock Exchange’s market index slipped 0.01 point to 569.79.
More than 9 points of the Dow’s 14-point gain was based on 3M, which rose 3 1/8 to 74 3/8. 3M reported third-quarter earnings of 95 cents a share, up from 82 cents a year ago. Its results were heartening to traders, who earlier in the week had sold shares of companies that just met or were below earnings expectations.
Oil company shares added an additional 13 points to the Dow, as heating oil futures prices were up 12.3 cents to 71.72 cents a gallon. Texaco helped lead the Dow industrials higher and rose 2 1/2 to 103 1/4. Exxon rose 1 1/4 to 88 1/2 and Chevron, also a Dow component, rose 3/8 to 67 1/8.
Stocks began the day lower after the Commerce Department said orders to U.S. factories for big-ticket durable goods shot up 4.6% in September, the steepest jump in nearly four years. But then the National Assn. of Realtors said September sales of existing homes fell 2.9%, challenging the notion that the economy is heating up too fast.
The housing data “reconfirmed that the economy slowed in September,” said Hugh Johnson, market strategist at First Albany Corp. “It made it all that much more unlikely that the Federal Reserve would raise interest rates in November, and it gave new life to both the bond and stock markets.”
Among Friday’s highlights:
* Investors took profits in the railroad stocks after Norfolk Southern, which is battling for control of Conrail, asked a federal court to block Conrail’s proposed merger with CSX.
Conrail shares fell 1/4 to 93 3/8, Norfolk Southern was down 1 to 91 1/2 and CSX ended up 1/8 at 44 1/8.
* Aetna rose 3 to 63 1/8 after defying uncertainty elsewhere in the health-care insurance industry by meeting analysts’ expectations for third-quarter earnings. Its results included newly acquired U.S. Healthcare.
* Among initial public offerings, Triumph Group, an aircraft component maker, rose 2 3/4 to 21 3/4, and Metris, a direct marketer of consumer products, surged 4 3/8 to 20 3/8. P.J. America, with 42 Papa John’s pizza stores, jumped 3 7/8 to 16 3/8.
In overseas trading, the Nikkei index in Tokyo declined 1.25%, dropping for the fifth consecutive session under selling pressure from foreign investors discouraged about Japan’s sluggish economy.
