*** Bloomberg Market Update ***
Stock Market Update
Thu, 11 Mar 1999, 2:21am EST
U.S. Stocks Rise to Records as Oil Companies Advance With Crude
New York, March 10 (Bloomberg) -- U.S. stocks rose to
records as Exxon Corp., Schlumberger Ltd. and other oil companies
advanced with the price of crude. DuPont Co. gained on plans to
boost its drug, nutrition and agricultural chemicals business.
The Dow Jones Industrial Average rose 79.08, or 0.8 percent,
to a record 9772.84. The Standard & Poor's 500 Index gained 7.00,
or 0.6 percent, to a record 1286.84. The Nasdaq Composite Index
climbed 13.07, or 0.6 percent, to 2406.01, still more than 100
points short of its Feb. 1 high of 2510.09. About five stocks
rose for every four that fell on the New York Stock Exchange.
Oil stocks gained after the world's top producers agreed to
meet in Amsterdam this week to discuss cutting production to
boost prices.
''The market is hoping there'll be a better supply-demand
situation there,'' said Charles Mayer, manager of the Invesco
Industrial Income Fund and director of investments for Invesco
Funds, which oversees $21 billion in Denver. ''Investors' fear of
missing a sustained move is driving these stocks.''
Exxon gained 3 3/16 to 73 1/8 and Schlumberger rose 3 3/16
to 58 1/2. Chevron Corp. jumped 3 5/16 to 83 1/4. Crude climbed
84 cents a barrel to $14.69 on the New York Mercantile Exchange,
a five-month high.
''Portfolio managers are all dying to buy oil service''
shares such as Schlumberger and Halliburton Co., said William
Brown III, president of W.H. Brown & Co., an oil consulting firm
in New York. Production cuts ''would have significant
implications for oil stocks.''
The Philadelphia Oil Service Sector Index rose 11 percent to
a two-month high. Halliburton rose 4 1/4 to 36 1/2 and Smith
International Inc. gained 3 3/4 to 34.
The Invesco Industrial Income Fund's core oil holdings
include Schlumberger, Halliburton, Unocal Corp., Apache Corp. and
Atlantic Richfield Co., Mayer said.
DuPont
DuPont rose 3 13/16 to 57 3/8, contributing most to the Dow
average's gain. The largest U.S. chemicals maker said it will
issue a tracking stock for its life sciences business. The
company also said it is seeking partners in the pharmaceuticals
industry and expects to sign one or more alliances with drug
companies this year.
J.P. Morgan & Co. rose 2 1/2 to 118 7/8. The company's
business has picked up as it puts last year's global market
turmoil behind it, and money flow analysis shows that investors
are confident of further gains, pouring cash into the stock even
when it falls. If the stock continues to gain, the firm could be
in a position to acquire a money manager or brokerage. If not, it
may have no choice but to put itself up for sale.
Just today, Banque Nationale de Paris SA's hostile bid for
two French rivals prompted optimism for more industry
consolidation. BNP, France's No. 3 bank, offered to buy rivals
Societe Generale SA and Paribas SA, which have a friendly merger
agreement, in a transaction valued at $37.7 billion. If
successful, the combination would be the world's only $1 trillion
bank in terms of assets.
''Merger activity continues, as we saw today with the French
banks,'' said Miles Berryman, who helps manage 8 billion pounds
($13 billion) at Coutts & Co. in London. ''That's going to be an
underlying support for equity markets.''
Citigroup Inc. rose 1 1/2 to 64 after analysts at Morgan
Stanley raised their estimates for 1999 and 2000 on the world's
largest financial services company, citing continued strength in
the brokerages. Citigroup's consumer business should benefit from
cost-cutting and improving credit quality in North America and
Europe, the analysts said.
In composite trading, 171 stocks reached 52-week highs,
while 200 fell to lows.
Computer Associates
Computer Associates International Inc. tumbled 6 to 34.
Demand for business software could slow as companies cut back on
spending as the year 2000 approaches, said analyst Charles
Phillips at Morgan Stanley Dean Witter & Co., who cut his
investment rating on Computer Associates to ''neutral'' from
''outperform.''
It was the biggest drop for Computer Associates since July
22, when it warned sales and earnings would be hurt for several
quarters by an economic slowdown in Asia.
Other business software companies declined. SAP AG, the
world's largest maker of business computer software, fell 1 3/8
to 26 after indicating at an analysts' meeting that 1999 first-
quarter earnings won't meet expectations because of slumping
demand. SAP's warning followed an unexpectedly wide loss last
week at Baan NV, Europe's No. 2 business- software maker. Oracle
Corp., the No. 1 database software maker, fell 13/16 to 37 15/16.
America Online Inc. gained 2 3/4 to 92 7/8, Yahoo! Inc.
climbed 6 5/16 to 173 5/8 and Amazon.com Inc. rose 7 3/16 to 137
1/8 after Merrill Lynch & Co. analyst Henry Blodget, who
correctly predicted that Amazon.com would reach $400 a share,
told the firm's clients to buy the stocks.
''The Internet changes the way we go about our lives,'' said
Eric Efron, who helps manage the $869 million USAA Aggressive
Growth Fund in San Antonio, Texas. ''I think the long-term
prospects are very good.''
Lycos Inc. rose 13 3/4 to 110 after CMGI Inc., the biggest
Lycos shareholder, said it hired investment bank Morgan Stanley
to find buyers other than USA Networks Inc. for the No. 3
Internet search service. CMGI Chairman David Wetherell, who quit
Lycos's board on Monday, said he has begun talks with other
potential acquirers.
Movers
Rural phone company Century Telephone Enterprises Inc.
jumped 3 13/16 to 67 1/4. The company will replace Rubbermaid
Inc. in the Standard & Poor's 500 Index on a date to be
announced. Rubbermaid is merging with Newell Co., which is
already a member of the index. Stocks typically rally when they
enter the S&P 500 as index-weighted funds buy the stock to track
the performance of the index better.
Household International Inc. rose 4 to 45 13/16 after the
consumer financial services company's board authorized the
repurchase of as much as $2 billion of the company's stock. At
current prices, that represents about 10 percent of the company's
stock outstanding.
Northern Telecom Ltd. rose 4 to 62 after the No. 2 North
American phone-equipment maker said AT&T Corp. is testing Nortel
products that direct voice and data on phone networks, a
potential blow to rival Lucent Technologies Inc. AT&T, the No. 1
U.S. phone company, traditionally bought most of its switching
gear from Lucent, which it spun off in 1996. Lucent fell 2 5/16
to 106 5/8.
Fluor Corp. fell 4 5/16, or 13 percent, to 30 and was the
biggest loser in the S&P 500 after the largest U.S. engineering
and construction company said yesterday its business is slowing.
Goldman, Sachs & Co. analyst Chris Hussey lowered his rating on
the company to ''market perform'' from ''market outperform.''
Metro Networks Inc. rose 2 1/8 to 49 5/8. The provider of
traffic reporting services said it earned 47 cents a share in the
fourth quarter, topping the 42-cent average estimate of four
analysts polled by First Call. |
