clarinews@clarinet.com (JANICE KIRKEL, UPI Business Writer) (02/03/90)
_N_e_w_s_p_a_g_e_ _S_t_o_c_k_s NEW YORK (UPI) -- Stocks closed higher Friday in active trading as a new burst of takeover activity and a more upbeat perception of the economy fueled a week-ending rally. The Dow Jones industrial average, which fell 4.28 Thursday, rose 16.44 to close just above the key 2600 level, at 2602.70. Among broader market gauges, the New York Stock Exchange composite index gained 1.23 to 182.75. Standard & Poor's 500-stock index gained 2.13 to 330.92. The price of an average NYSE share climbed 23 cents. Advances pounded declines 1,005-497 among the 1,964 issues crossing the NYSE tape. Big Board volume totaled 164,400,000 shares, compared with 154,580,000 shares traded Thursday. The market saw a flurry of new takeover-related activity Friday, which analysts said boosted prices, as did a strong job report, which they said allayed fears of an imminent recession. Analysts noted Friday's news that Roche Holding Ltd. has agreed to buy half of Genentech for $36 a share and reports this morning that the Belzberg family of Canada, long active in the world of corporate takeovers, has hired a financial adviser in connection with its investment in Armstrong World Industries Inc. They also cited the new bid earlier this week for Georgia Gulf from NL Industries, controlled by investor Harold Simmons, and talk over the last few days about a new buyout bid for UAL, parent of United Airlines. Reports late Friday said Simmons had raised his stake in Lockheed to almost 19 percent and would consider seeking control of its board. ``Takeover activity is creeping back into the market,'' said Tom Gallagher, managing director in charge of capital commitment at Oppenheimer and Co., ``Also, people are starting to look past the short term and say the economy is okay and the Federal Reserve thinks it's okay,'' he said, referring to testimony this week by Fed Chairman Alan Greenspan that the chances of the economy going into a recession are less than 50 percent and less than they were some months ago. The government issued a stronger-than-expected job report early Friday, saying the nation's unemployment rate for January was a steady 5.3 percent, unchanged for the past eight months. The rate had been expected to rise 0.1 of a point. The department also said non-farm payroll employment increased by 275,000 last month, compared with expectations of a rise of only 181,000. On the trading floor, Genentech was the most active NYSE issue, surging 8 1/8 to 29 7/8 after its agreement with Roche, and boosting the whole drug sector. Philip Morris followed, up 1/4 to 38 1/4. USX was third, up 3/8 to 34 1/4 in dividend-related trading. Among the other blue chips, IBM rose 5/8 to 98 3/8, AT&T rose 1 to 39 3/8, Coca-Cola gained 5/8 to 69 3/8 and Boeing added 1 to 62 1/4. Takeover-related issues were strong. UAL lost most of its intraday gains of more than $3 a share to end up 3/4 at 130 1/2 amid talk of a new buyout bid from the pilots' union. Hilton Hotels surged 2 1/2 to 61. Its board took no action on any takeover offers but told advisers to ``further develop'' the acquisition proposals. Holiday jumped 2 1/8 to 60 1/4, Sea Containers rallied 2 1/4 to 63 1/2 after its board urged shareholders to approve Temple Holdings' offer to buy most of the company, and Telecom-USA extended its advance, up 1 1/4 to 19 3/4 after ending talks about a proposed takeover of ALC Communications. Elsewhere in the drug sector, Eli Lilly rose 1 3/8 to 64 1/4, Upjohn added 1 to 35 7/8, and Schering-Plough jumped 2 1/8 to 80 3/8. Volume of NYSE-listed issues, including trades in stocks on regional exchanges and in the over-the-counter market, totaled 195,076,260 shares, compared with 184,881,780 shares traded in the previous session. Prices closed higher in moderately active trading on the American Stock Exchange. The Amex Market Value index rose 2.06 to close at 353.56. The price of an average share gained 8 cents. Advances led declines 356-198 among the 789 issues traded. Composite volume totaled 15,425,105 shares, compared with 15,843,110 traded Thursday. Hillhaven led the Amex issues, unchanged at 1 3/4. The National Association of Securities Dealers composite index rose 4.46 to close at 422.22.