Stocks Climb As Investors Fine-Tune Portfolios
Stocks rose for the second day in a row Wednesday, despite lower bond prices, as investors continued to make year-end adjustments to their portfolios.
The Dow Jones industrial average rose 38.44 to close at 6,346.77 on top of Tuesday’s 39.98-point gain. IBM continued to lead the blue-chips. The Dow opened higher and climbed steadily all day, in a reversal of recent volatility.
But analysts and investors were cautious about assigning too much importance to the day’s gains.
James Solloway, research director at Argus Research Corp., said stocks bounced back in the last two sessions because sharp declines earlier this month were overdone. “But whether that’s going to last beyond this week or beyond Christmas, is another story,” he said.
Volume on the New York Stock Exchange totaled 500.49 million shares as of 4 p.m. vs. 519.84 million in the previous session.
Some of the stocks that moved substantially or traded heavily Wednesday:
NYSE
ADT Ltd. rose 3-1/8 to 23-1/4.
Western Resources Inc. rose 1/8 to 31-3/8.
In its second hostile takeover attempt this year, Western Resources announced a hostile bid of $3.5 billion for Boca Raton-based ADT, the nation’s biggest burglar-alarm company. The offer amounts to $22.50 per share in cash and stock and follows the collapse of a plan by Republic Industries Inc. to buy ADT for $4.3 billion.
Merck & Co. rose 3/4 to 77.
The company said Wednesday it expects fourthquarter earnings to be at the top of analysts’ estimates of 80 cents to 86 cents a share, up from 70 cents a year ago. The company said it also expects earnings next year to be at the top of analysts’ estimates of $3.55 to $3.75.
Warner-Lambert Co. rose 3/8 at 74-5/8.
The Morris Plains, N.J., drug company received approval from the Food and Drug Administration to market its Lipitor cholesterol-lowering drug.
Compaq Computer Corp. rose 6-1/8 to 78-3/8.
Computer Associates International Inc. rose 2-3/4 to 62-5/8.
Compaq and Computer Associates’ Cheyenne division entered into a worldwide strategic alliance to jointly develop, market and support enterpriseclass storage management solutions.
Zenith fell 7/8 to 11-1/8.
The television maker said it will cut its U.S. work force by more than 25 percent, including 375 salaried posts and 800 hourly jobs, and thereby cutting 1997 cost by $20 million.
NASDAQ
Avondale Industries Inc. rose 3 to 20-1/2.
The stock jumped 19 percent after a team led by the company won a Pentagon shipbuilding contract with an initial value of $641 million, but a potential value of billions of dollars more.