Strong Earnings Reports Drive Up Stock Prices

Investors rewarded strong profit reports by driving major stock indexes higher on Thursday, but many individual stocks stumbled on mounting concern about the economy.

The Dow Jones industrial average rose 57.45 points to 5,124.35, more than compensating for a 21-point drop on Wednesday.

Although volume was heavy at 449.89 million shares as of 4 p.m., slightly behind Wednesday’s pace, advancers led decliners by just 7 to 5 on the New York Stock Exchange.

Gains in just a few shares, including IBM, Caterpillar and McDonald’s, pushed the Dow index higher.

Away from a few high-profile companies, however, the earnings picture was not so bright.

“For the first time in three years, we’re beginning to run into profit wobblies,” said Larry Wachtel, a market analyst at Prudential Securities. “That is the dominant psychology.”

Some of the stocks that moved substantially Thursday: NYSE

International Business Machines Corp. rose 8-5/8 to 96-1/4.

Fourth-quarter profit at the Armonk, N.Y., computer giant was $3.09 per share after pre-tax charges, up from $2.06 last year.

Caterpillar rose 5-3/8 to 59-1/4.

The heavy equipment maker earned $1.53 a share, for the three months ending Dec. 31, compared with $1.38 per share in the same period a year ago. Sales rose to $4.2 billion from $3.9 million in the quarter despite a strike by the United Auto Workers Union.

Eastman Kodak Co. fell 2-1/8 to 67.

The company earned 80 cents a share in the fourth quarter, after a 15-cent per share write-off, up from 5 cents a share after special charges last year. Analysts’ estimates for the quarter averaged 94 cents.

McDonnell Douglas fell 3-3/4 to 88-1/4.

The St. Louis defense-equipment maker reported a fourth-quarter loss of $8.35 per share but said it would have posted a 13 percent profit increase without the cost of an accounting change.

NASDAQ

Apple Computer fell 2-1/16 to 31-15/16.

PaineWebber Inc., Oppenheimer & Co. and J.P. Morgan Securities Inc. downgraded the Cupertino, Calif., computer maker’s stock, a day after it posted a loss of 56 cents a share for the quarter ended Dec. 31.

AMEX

Viacom fell 3-5/8 to 37.

Viacom Series B fell 1-3/4 to 37-1/4.

Frank J. Biondi Jr. was deposed as chairman after disagreements with chairman Sumner Redstone. Viacom owns Paramount Pictures and MTV.