RUMORS ANIMATE DISNEY STOCKS; RISE DUE TO EXPECTED PUBLISHING ARM SALE.

Byline: Dave McNary Staff Writer

Wall Street gave an endorsement Friday to Walt Disney Co.'s expected sale of its Fairchild Publications magazines, in hopes that the entertainment giant is following through on promised restructuring plans.

The stock, which has been lagging on poor earnings for the past year, bounced up more than 4 percent, gaining $1.0625 to $27.1875. The stock has edged up from its 1999 low close of $25.50 a week ago but remains down 28 percent from its all-time high 15 months ago.

Disney had no comment on a New York Times report that it is in talks to sell Fairchild, which includes W, Women's Wear Daily, Los Angeles and Jane magazines, to either Conde Nast or Hearst for as much as $650 million.

``I think the Fairchild deal is more than rumors,'' said Barry Hyman, managing director at Ehrenkrantz King Nussbaum. ``It would not be for a great deal of money. So the reaction of the stock today is more psychological and reflects the belief that Disney may be responding to pressure to get out of its doldrums and become more focused on its entertainment properties.''

Disney Chairman Michael Eisner promised in late April that the Burbank-based entertainment giant would examine its cost structure. Since then, a hiring freeze has been imposed and it has started to streamline its film and video staffs, but Wall Street has remained impatient with Eisner's strategy.

Disney acquired the magazines as part of its $19 billion buyout of Capital Cities/ABC in 1995. It sold off several newspapers and trade magazines in separate deals in 1997.