Strong Earnings, Rush To Safety Boost Stocks

Stocks shot higher Friday in reaction to strong earnings reports from high-profile technology and blue-chip companies.

The Dow Jones industrial average climbed 60.33 points to 5,184.68, boosting the week’s gains to 123.56 points and more than erasing the previous week’s loss in the closely watched blue-chip average.

After the gains topped 50 points shortly after 1 p.m., the New York Stock Exchange imposed limits on computer-driven program trading to try to maintain order. The collar remained in place through the end of the trading session.

The market gain was built on heavy volume, with a revised 496.96 million shares changing hands on the Big Board as of 4 p.m. But advancing issues barely led decliners by 6 to 5 on the NYSE.

Blue-chip stocks benefited from a rush to safe, highly liquid names, said Thomas Brown, market strategist at Rutherford, Brown & Catherwood.

“This is … a market where quality is leading the way, and the cyclicals are really in the forefront of that,” Brown said.

The Dow industrials were led higher by IBM, which rose 6-1/2 to 102-1/2 in leading volume of more than 13 million shares on the Big Board. IBM extended Thursday’s gain of 8 points, after the computer giant posted a 41-percent gain in fourthquarter earnings.

On Friday, IBM was joined in the earnings winners circle by Microsoft. The software maker said late Thursday that strong sales of its new Windows 95 operating system pushed second fiscal quarter earnings up to 90 cents a share from 60 cents a year earlier. Analysts had predicted a profit of 84 cents.

Microsoft shares jumped 4-1/4 points to 91-7/8 in Nasdaq trading.

Some of the stocks that moved substantially Friday:

NYSE

Chrysler rose 1-7/8 to 54-1/8.

The No. 3 U.S. automaker said fourth-quarter earnings fell to $2.70 per share from $3.20 a year ago, but the results beat analysts’ estimates of $2.22, and the company’s revenues rose.

Micron Technology Inc. fell 7/8 to 31-1/8.

Marking the second top management shake-up in as many years, the Boise computer chip maker said Steve Appleton, the company’s 35-year-old CEO, had resigned “for personal reasons,” effective immediately.

General Electric Co. rose 1-3/4 to 74-1/4.

The Fairfield, Conn. electronic equipment manufacturer said its fourth-quarter profits more than doubled to $1.12 a share from 45 cents a year earlier.

NASDAQ

Cephalon fell 12-1/2 to 23-3/8.

Chiron fell 5-1/2 to 104.

Cephalon said the Food and Drug Administration declined to permit expanded clinical tests of its treatment for Lou Gehrig’s disease for now because of concerns over recently reported trial data. Dillon Read & Co. downgraded Chiron, the marketing partner for the drug, to neutral from outperform.

AMEX

Organogenesis fell 1-1/4 to 15-3/4.

Biotechnology shares fell after the Food and Drug Administration declined to permit expanded clinical tests of Cephalon’s treatment for Lou Gehrig’s disease.