NEW YORK — U.S. stocks surged yesterday for a second day, buoyed by better-than-expected first-quarter profits at financial, consumer and industrial companies.
The strength of earnings — at NationsBank Corp., Travelers Group Inc., Clorox Co., Corning Inc. and more than a dozen others — defused concern that slowing profit growth will keep a lid on the stock market.
The Dow Jones industrial average rallied 60.33, to 5,592.92, bringing the 30-stock average to within 1.7 percent of its April 3 record. Stocks continued to rebound from a loss of 4.8 percent between the record and Thursday’s session low.
In the broader market, the Standard & Poor’s 500 index gained 5.77, to 642.48. Advancing stocks outnumbered decliners by more than 16 to 7 on the New York Stock exchange, where volume dropped to 346.2 million shares from Friday’s 412 million.
The Nasdaq composite index rose 9.5, to 1,110.44; the Russell 2,000 index of small-company shares added 2.34, to 333.52; the Wilshire 5,000 index increased 54.03, to 6,341.23; and the American Stock Exchange market value index gained 3.85, to 576.11.
NationsBank, Federal Home Loan Mortgage Corp. and Merrill Lynch & Co. all reported stronger-than-expected first-quarter profits yesterday, reinforcing J. P. Morgan & Co. and Fleet Financial Group Inc.’s similar reports last week.
Merrill Lynch rose $1.25, to $59, after the nation’s largest brokerage said first-quarter earnings jumped to $2.03 a share from $1.03 a year ago, beating even the most optimistic estimates.
Financial issues also got a boost from yields on benchmark 30-year Treasury bonds, which fell 1 basis point to 6.79 percent.
Enserch Corp., a natural gas and oil exploration and production company, climbed $4.375, to $20.75. Dallas-based electric utility Texas Utilities Co. agreed to buy Enserch for about $23.68 a share in stock, a 45 percent premium to Enserch’s closing price Friday. Texas Utilities dipped 25 cents, to $39.375.
Kansas City Power & Light Co. surged $2.125, to $26, after Western Resources Inc. offered to buy it for about $28 a share in stock, or 17 percent more than Friday’s price.
The offer upset the utility’s plan to merge with Utilicorp United Inc. Western Resources dropped 25 cents, to $28.875, and Kansas City-based Utilicorp shed 12 1/2 cents, to $28.125.
Computer, semiconductor and software stocks surged as investors anticipated rising profits from Intel Corp. and Microsoft Corp., and after Merrill Lynch repeated a “buy” recommendation on International Business Machines Corp.
Intel, ahead 93 3/4 cents, to $60.5625, said after the market closed that first-quarter net income was unchanged at $1.02 a share, beating expectations of 98 cents.
Microsoft, up $2.39, to $103.5156, is to announce earnings Thursday. IBM, which will report earnings before the market opens tomorrow, jumped $2.625, to $114.125, after sliding $6 Friday.
Other high-technology companies benefited. Hewlett-Packard Co. vaulted $2.125, to $97.50; Digital Equipment Corp. gained $1, to $52.875; Novellus Systems Inc. spurted $1.50, to $45.25; and Linear Technology Corp. rallied $2.50, to $39.25.
Clorox rose 87 1/2 cents, to $81.50, after reporting that its third-quarter earnings rose to $1.15 a share, above expectations of $1.14 and the year-ago quarter’s $1.02.
Corning rose $1, to $35. Its first-quarter earnings of 31 cents a share beat an average forecast of 27 cents from analysts.
Transportation stocks made their biggest advance in a month.
UAL Corp., parent of United Airlines, surged $3.125, to $211; Federal Express Corp. climbed $3.25, to $75; AMR Corp., owner of American Airlines, added $1.875, to $88.375; and Delta Air Lines Inc. advanced $2.125, to $80.
Pub Date: 4/16/96
