clarinews@clarinet.com (02/03/90)
complete writethru -- adding composite volumes, updating NYSE actives)
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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 advisor 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 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 advis-
ers 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.