FINANCIAL MARKETS : Blue Chips Hit Record in Turnaround

Blue-chip stocks rose to record highs in the final hours of trading Thursday, turning around a lackluster session in which investors mostly reacted to individual earnings reports.

The Dow Jones industrial average rose 24.93 points to 4,802.45, beating its record close of 4,801.80 points set Sept. 14. The blue-chip index dawdled for most of the day, then advanced 20 points after 2 p.m. on technical influences, surging to a new high on the eighth anniversary of the fabled 1987 market crash.

Despite the closing strength in the industrial average, declining issues edged advancers on the New York Stock Exchange. Big Board volume was high at 406.62 million shares, but down from 411.28 million on Wednesday.

Some broad-market indexes also set new highs. The NYSE’s composite index rose 1.10 to 315.39, beating its record close of 314.33 set Sept. 20. The Standard & Poor’s 500-stock index added 3.22 points to 590.66, closing above its Sept. 20 record of 586.77.

The Nasdaq composite index rose 1.84 points to 1,046.97, still well below its closing record of 1,067.40 set on Sept. 13. And the American Stock Exchange’s market value index declined 1.07 points to 534.11.

Traders and analysts said the double expiration of options and futures today was responsible for most of the late gains. But investors also reacted during the day to earnings reports, which in many cases defied expectations.

“There have been a lot of accidents,” said David Shulman, Salomon Bros.’ market strategist. “There have been upside surprises and downside surprises, but the upside surprises have been less surprising.”

One big earnings disappointment was General Instrument. Its shares plunged 7 to 20 in leading volume on the New York Stock Exchange.

The company said late Wednesday that third-quarter operating net income dropped to 40 cents a share on a diluted basis from 44 cents a year ago, and said it expects 1996 operating income to be on par with 1995.

Another earnings blow was delivered by Nokia. Its American depositary receipts dropped 8 3/8 to 60 1/2 on the Big Board. Finland’s telecommunications group said that while operating profit rose 76% in the first eight months of the year, the company is uncertain about the outlook of the U.S. cellular phone market.

Also in the technology sector, Apple shares declined 2 5/8 to 34 3/4 in Nasdaq trading, after the computer maker said late Wednesday that fiscal fourth-quarter net profit sank 48%.

Other technology stocks were firmer, with IBM up 1 7/8 to 98 1/4, Compaq up 1/8 to 54 1/4, and Microsoft up 1 1/8 to 96 3/4.

Micron Technology rose 1/8 to 72 7/8 on the Big Board. Intel rose 1/4 to 68 in Nasdaq trading.

Banking stocks gave back some of the strong gains they made on Wednesday, after Wells Fargo made a $10-billion hostile bid for First Interstate. First Interstate’s shares fell 3/8 to 139 7/8, and Wells ended down 5/8 at 228 3/8.

Bankers Trust shares gave up 1 3/4 to 68, after the troubled bank appointed Frank N. Newman, a highly respected former deputy of the Treasury, as chairman and chief executive. Bankers Trust said its third-quarter profit rose 70% from the second quarter but was still down from a year ago. However, the earnings soundly beat Wall Street’s expectations.

Stocks got a small boost from the bond market, where the yield of the 30-year Treasury bond fell to 6.30% from 6.33% on Wednesday.

Bonds rose in the morning and stayed aloft all day, buoyed initially by weaker-than-expected economic news on housing and unemployment.

The dollar fell against most leading currencies as traders used comments by the head of Germany’s central bank as an excuse to buy German marks and sell dollars.

Bundesbank President Hans Tietmeyer, at a conference in Berlin, said that a currency is better off if it is slightly overvalued rather than undervalued.

In late New York trading, the dollar fell to 1.4065 marks from 1.4230 marks Wednesday. It ended at 100.45 Japanese yen, down from 100.87 yen Wednesday. In commodities trading, cocoa prices bounded higher bolstered by fears of political unrest in leading producer Ivory Coast and wheat prices continued to soar as worried importers scrambled to secure supplies.

In overseas trading, the 225-share Nikkei index in Tokyo ended up 59.39 points to 17,955.36.

In London, the FT-SE 100 index finished at 3,578.6, off 14.4 points from Wednesday’s record closing level.

In Mexico City, the key Bolsa index ended up 19.13 points to 2,351.57.

Market Roundup, D6