Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.invest From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: invest Thu, Apr 16 1992 Date: Thu, 16 Apr 92 05:42:24 EDT Message-ID: 04-16 0000 DECISIONLINE: Personal Investing USA TODAY Update April 16, 1992 Source: USA TODAY:Gannett National Information Network WALL STREET RALLY FORGES HIGHER: Good earnings news catapulted stocks Wednesday to another record-breaking day. The Dow Jones industrial average jumped 47.63 points (1.4%) to 3353.76 - its second-straight record close. Other market indexes also gained. Wednesday's surge was the latest in a rally that began last Thursday when the Federal Reserve nudged interest rates lower. Since then, the Dow is up 172 points, more than 5%. (For more, see special Rally package below.) STOCKS ADVANCE ON COURT RULING: Shares of software maker Microsoft soared 11 7:8 Wednesday to close at $128 7:8. Analysts issued buy recommendations on the stock after Tuesday's court decision to throw out most of Apple Computer's copyright-infringement case against Microsoft. Shares of Hewlett-Packard, which was a co-defendant with Microsoft, gained 2 1:2 to close at $82 3:8. Apple jumped 1 3:4 to $60 1:2. CENTOCOR DIVES ON FDA DECISION: The bruising battle between biotechnology companies XOMA and Centocor to market a drug to treat septic shock took another dramatic turn Wednesday. Centocor announced that the Food and Drug Administration decided not to approve its drug, Centoxin, because of a lack of evidence supporting the drug's effectiveness. The news sent the stock plummeting 12 3:4 points, or 41%, to $18 1:2. XOMA ALSO DENIED: XOMA announced late Tuesday that the FDA had formally said it wouldn't approve XOMA's septic shock treatment, E5, based on the one study it reviewed. But XOMA, which submitted two studies, says the official notice was "old news" and that it's still "highly confident" E5 will win FDA approval after the other study is reviewed. XOMA's stock fell 4 points, or 22%, to $14 1:2 Wednesday. SPLITS NOT ALWAYS GOOD: Stock splits are making a return. And while investors love them, stock splits can be a sign of a market peak. Companies typically like to split their stocks after the price has risen above $100. Splits havn't been good for stocks in the past: The number of stock splits on the New York Stock Exchange rose sharply in 1987 - just before the market crash; Dow stocks often do poorly after a split. AT&T HAS STRONG QUARTER: AT&T said Wednesday its first-quarter net income rose 16.6%, to $883 million from $758 million in last year's first quarter on revenue of $15.38 billion, due to growth in long-distance calling. Earnings per share rose to 67 cents from 59 cents in the year-ago quarter. GOLD AND SILVER PRICES FALL: Gold and silver prices sagged Wednesday. On the New York Commodity Exchange, gold for current delivery dropped $3.50 a troy ounce to settle at $336. Later, Republic National Bank in New York quoted an ounce of gold bullion at $335.70, or $3.55 lower than Tuesday's late bid. On New York's Comex, silver for current delivery settled at $4.006 a troy ounce, down from $4.101 Tuesday. SPECIAL PACKAGE ON RALLY: BAD NEWS PUSHED LAST RALLY: The current market advance is different from the 10% rally that started after the Fed last cut rates Dec. 20. Then, bad economic news was good for stocks. Investors hoped lower interest rates would send stocks higher - and hoped bad economic news would lead to more rate cuts. That rally died when investors began to worry that good economic news would lead to higher interest rates. STOCKS ADVANCE ON GOOD NEWS: Now, though, good news is good for stocks again. Higher rates are less of a worry. That allows investors to focus on fundamentals such as better-than-expected earnings. Wednesday, several stocks hopped on better-than-expected first-quarter earnings: Semiconductor maker Motorola gained 6 to $82; chemicals maker Rohm & Haas rose 4 7:8 to $53 5:8; and CBS jumped 7 1:2 to $185 1:2. VIEWS ON RALLY MIXED: Some analysts downplay the first-quarter results. They point out that earnings in the first quarter last year were depressed by the recession and gulf war. So strong earnings gains compared with that quarter are no big deal. More-optimistic analysts say the market is in the early stages of a new phase of the rally. Stocks will gain for the fundamental reason that business is getting better. (End of package.) DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Thursday at 3353.76, after closing up 47.63 Wednesday. The New York Stock Exchange composite opens at 229.15, up 1.84. The American Stock Exchange market value opens at 394.16, up 2.02. The NASDAQ OTC composite opens at 600.03, up 5.22. DOLLAR OPENS UP: The dollar opens mixed on foreign markets Thursday. It opens at 0..5700 British pounds, down from 0.5669; 5.6175 French francs, up from 5.5950; 133.30 Japanese yen, up from 133.08; and 1.6630 German marks, up from 1.6527. (As of 3 p.m. Wednesday. Source: First American Bank of New York.) 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Personal Investing Editor: William Snoddy. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM