INVESTORS HEARTENED BY CIGARETTE TALKS.

Byline: Associated Press 

Big cigarette company stocks rose more than 10 percent Wednesday, reflecting investor hopes that an industrywide settlement of tobacco lawsuits would lift a cloud hanging over companies like Philip Morris and RJR Nabisco.

Philip Morris, which makes No. 1 cigarette brand Marlboro, rose 4-1/4 to close at 43-1/4. It was the biggest gainer among the 30 Dow Jones industrial stocks, accounting for about 14 points of the average's 92-point gain.

Winston maker RJR Nabisco rose 3-1/4 to 33-1/2 per share.

Both company stocks, however, still haven't made up the ground lost in the overall market's fall from highs of mid-March.

Investors' reaction to the news of settlement talks showed just how fearful the stock market is that tobacco companies might start losing some of the 268 cases that RJR Nabisco alone says are active. Also, defending against those suits costs cigarette companies hundreds of millions of dollars each year.

The talks involve the possibility of tobacco companies contributing to a fund of as much as $300 billion to cover smoking claims and face stiff restrictions on U.S. advertising.

Still, any settlement wouldn't apply to foreign cigarette sales, which is the biggest growth area for U.S. tobacco companies. Philip Morris reported Wednesday that its quarterly profits rose 13 percent chiefly from higher profits of foreign tobacco sales.

Other tobacco companies were also higher Wednesday. B.A.T Industries, parent of Brown & Williamson, rose 1 to 17-7/8; Loews Corp., maker of Newport, rose 5-3/8 to 91-3/4, and Liggett parent Brooke Group rose -1/8 to 4-3/8.