3M Earnings Pull Dow Back Above 6,000

The blue-chip Dow Jones index snapped a four-session losing streak Friday and climbed back above the 6,000 mark, bolstered by an unexpectedly strong earnings report from 3M.

A modest rally in the bond market also lent support to stocks, although the broad market finished mixed after a rocky week.

The Dow added 14.54 points to 6,007.02 on Friday in relatively slow trading. For the week the index was off 87.21 points, as profit takers pared some key stocks from their record heights.

Winners and losers were nearly evenly matched on the New York Stock Exchange on Friday. Most broad stock indexes were marginally lower. The Nasdaq composite index of mostly smaller stocks dipped 4.40 points to 1,222.60. For the week it lost 19.88 points.

Stocks began the day lower after the Commerce Department said orders to U.S. factories for big-ticket durable goods shot up 4.6% in September, the steepest jump in nearly four years. But then the National Assn. of Realtors said September sales of existing homes fell 2.9%, challenging the notion that the economy is strengthening.

The housing data “reconfirmed that the economy slowed in September,” said Hugh Johnson, market strategist at First Albany Corp. “It made it all that much more unlikely that the Federal Reserve would raise interest rates in November, and it gave new life to both the bond and stock markets.”

Indeed, the bond market seemed happy with the housing data and unruffled by the factory orders data. The yield on the bellwether 30-year Treasury bond fell to 6.81% from 6.85% on Thursday. But there been little movement in the yield in recent weeks: It has mostly traded between 6.75% and 6.90%.

On Wall Street, analysts said this week’s weakness reflected worries about the trend in corporate earnings going forward. Although third-quarter results have been robust for many companies, there are fears that profit growth will slow sharply in 1997.

Still, 3M’s report Friday sent its stock up 3 1/8 to 74 3/8, accounting for about 9 points of the Dow’s 14-point gain. 3M, which earlier this year spun off its slow-growing data storage business, reported third-quarter earnings of 95 cents a share, up from 82 cents a year ago and better than analysts’ consensus estimate of 93 cents.

Among Friday’s highlights:

* Other stocks responding positively to earnings reports included Aetna, up 3 to 63 1/8 after defying uncertainty elsewhere in the health-care insurance industry by meeting analysts’ expectations for third-quarter earnings; American Power Conversion, up 3 5/8 to 19 7/8; and Herbalife International, up 2 1/8 to 19 7/8.

* On the downside, personal computer maker Gateway 2000 slumped 4 7/8 to 50 1/4 after its earnings report raised concerns about fourth-quarter results. Other stocks falling on earnings news included Octel, down 8 3/4 to 15 3/4; Kellogg, down 1 1/8 to 64 3/8; and Reliance Steel, off 3/4 to 38 1/2.

* Drug stocks were hit by profit taking. Merck sank 1 7/8 to 73 1/4, Lilly lost 2 to 69 3/4 and Bristol-Myers gave up 2 7/8 to 105 3/4.

* Among new issues, Triumph Group, an aircraft component maker, rose 2 3/4 to 21 3/4 in its first session of trading. P.J. America, with 42 Papa John’s pizza stores, jumped 3 7/8 to 16 3/8.

In foreign trading, Tokyo’s Nikkei-225 index fell for the fifth consecutive session, losing 1.3% to 20,740, under selling pressure from foreigners discouraged about Japan’s sluggish economy.

In Mexico City, the Bolsa index fell 45.93 points, or 1.4%, to 3,233.28 as the peso fell anew.

Market Roundup, D4