Still waters ran deep Tuesday on Wall Street as a flat Dow Jones industrial average masked strenuous activity beneath the surface in a near-classic example of a stock picker’s market.
Traders continued to punish any company reporting earnings they considered disappointing and to reward the hope or reality of better-than-expected earnings. But overall, the blue chips hardly moved, and the Dow average closed down 0.28 points at 3593.13.
Not so the Nasdaq index, which covers mostly medium- and small-capitalization stocks. It set a record high, closing up 4.81 points at 772.46.
The semiconductor sector attempted a rally, and a few stocks succeeded in coming back from almost a week of battering. Motorola, which issued a spectacular earnings report Monday after the market closed, finished up $5 a share at $103.50, a shade off its 52-week high of $105.12.
Intel spent most of the day in positive territory but closed down 50 cents at $65 a share. Texas Instruments regained $1.75 to close at $66.50; National Semiconductor gained 50 cents, to $18.50; and VLSI Technology picked up $1.25, to $17.
After semiconductors, brokerage stocks were the next-biggest gainers. The group rose in the wake of strong earnings from Merrill Lynch, Bear Stearns, PaineWebber and Charles Schwab. Merrill, the biggest U.S. brokerage firm, also declared a 2-for-1 stock split and raised its dividend 14 percent.
Generic drugs, which spurted Monday on takeover expectations, continued to rise or pull back in significant percentage moves, indicating they remain a center of selective interest.
Zenith Laboratories, which rose $4.25 Monday, backed off $1.25 Tuesday to close at $80.12. Biocraft Laboratories, which rose $3.50 Monday, gained another $1.50, to close at $34.87. Purepac fell $1.12, to $22; and Mylan Laboratories rose $1.75, to $32.14.
HEARTLAND REPORT
The stock of Tellabs, which makes and sells voice and data communication equipment, rose strongly Tuesday on expectations of a strong earnings report Wednesday. The stock rose $4.25 to close at $73.25, a 52-week high.
Also driving the stock price was the announcement late last week that Tellabs acquired Martis Oy, a provider of networking equipment in Helsinki, Finland, for about $70 million.
“That’s what we needed to get us into the international market,” said P.A. Guglielmi, Tellabs chief financial officer. “Martis Oy gives us very nice positioning as a global company.”
Tellabs stock has more than tripled in value since the company began reorganizing in January. The consensus forecast for third-quarter earnings is for 33 to 36 cents a share, but the stock movement Tuesday indicates optimism that that will be exceeded.
Guglielmi declined to comment directly on the earnings report.
John Nuveen, the investment-banking firm, reported a decline in third-quarter earnings and saw its stock decline $1.75, to $30.62. At one time during the day it traded as low as $29.50.
While earnings per share fell to 43 cents from 46 cents for the same quarter a year earlier, the Chicago-based company cited some special factors. Revenues actually increased, to $62.1 million from $59.8 million a year earlier.
Nuveen said it took its increased 1993 federal tax liability all together in the third quarter. And the number of shares outstanding increased nearly 4 million, to 40.3 million.
Shares of WMS Industries, which makes coin-operated amusement games and owns hotels and casinos, rose $2.62, to $31, after Viacom Inc. Chairman Sumner Redstone said he has applied to raise his stake in the firm to more than 25 percent of the common stock outstanding.
Redstone, who is involved in a bid to take over Paramount Communications, said he filed Friday with the Federal Trade Commission and the Department of Justice’s antitrust division for clearance to increase his holding, currently at 24.87 percent, or 5.9 million common shares.
Shares of Spiegel rose $2.50, to $44.75, after rising strongly Monday.
