Banks Help Send Dow Back Above 9,000

Stocks ended higher Monday as merger mania among the nation’s banks helped pull the market out of a slump.

The Dow Jones industrial average ended up 17.44 points at 9,012.30, closing above the 9,000 level for the second time ever, after shaking off a loss of nearly 70 points.

Stocks sentiment was dented by a slide in the long bond.

The bond market weakened following news that the Bank of Japan sold $12 billion of bills to raise cash that traders said was needed to prop up the yen.

The 30-year U.S. Treasury bond lost 20/32, raising its yield, which moves in the opposite direction of the price, by 0.04% from Thursday’s 5.92% close.

The dollar rose against the yen. In New York, the dollar was quoted at 129.60, up from 128.69 on Friday.

Analysts said the blue-chip market was the target of profit taking after Thursday’s 103-point surge. Financial markets were closed Friday in observance of Good Friday.

The Nasdaq composite index rose 4.71 points to 1,824.95.

“I think the market continues to be both excited and have indigestion with mega bank mergers, while at the same time having some apprehension toward first-quarter earnings,” said Tom Galvin, chief investment officer at Donaldson Lufkin and Jenrette.

The big news was the $62.5-billion stock swap between BankAmerica and NationsBank and the $29-billion merger pact between Banc One and First Chicago NBD.

The BankAmerica and NationsBank marriage creates the second-largest U.S. banking company with $570 billion in assets.

NationsBank also reported a 33% jump in first-quarter income to $1.14 billion, or $1.17 a diluted share, from $855 million, or 88 cents, a year earlier. The results beat the consensus estimate of $1.07 a diluted share.

BankAmerica rose $4.63, or 5.3%, to a record $91.13, while NationsBank climbed $4.19, or 5.5%, to a record $80.63.

First Chicago also reported first-quarter results. The bank’s net income edged up less than 1% to $383 million, or $1.30 a share, from $380 million, or $1.17, a year earlier, meeting the average forecast by analysts.

Banc One gained $2.13 to $63.88 and First Chicago was up $2.50 at $96.44.

Just one week ago, the historic $70-billion merger deal between Citicorp and Travelers Group shook the market and set off rampant speculation about who would be next. Investors had bid up the shares of potential deal makers.

That speculation intensified on Monday, driving financial stocks even higher. Chase Manhattan Bank, rumored by many to be next in line for a major deal, rose $4.94 to $146.56.

J.P. Morgan, long seen as a takeover target, helped pull the Dow into positive territory, gaining $7.06 to $147.63.

The Standard & Poor’s composite index of 500 stocks slipped 0.98 of a point to 1,109.69.

The NYSE composite index of all listed common stocks was off 0.58 of a point to 577.77. The average share was down 5 cents.

The Russell 2,000 index of smaller companies fell 0.48 of a point to 479.56. The American Stock Exchange composite fell 2.29 points to 738.32.

Overseas, Tokyo’s Nikkei-225 stock average fell 1%. European markets were closed for a holiday.

Among Monday’s market highlights.

* Eastman Kodak helped boost the Dow, rising $2.94 to $67. It is expected to report first-quarter earnings today. Kodak is expected to post results of 70 cents a diluted share, based on the average estimate of nine analysts surveyed by IBES International Inc. It earned 82 cents a share a year ago.

* Enron rose 19 cents to $47.25. The energy company is expected to report earnings today of 60 cents a diluted share for the first quarter, up from 57 cents a year earlier.