ARCO <ARC> UP ON HIGHER EARNINGS ESTIMATE Atlantic Richfield Co's stock rose sharply after analyst Eugene Nowak of Dean Witter Reynolds Inc raised his earnings estmates of the company, traders said. ARCO jumped 1-3/4 to 81-3/4. Nowak said that based on an average oil price of 17 dlrs a barrel in 1987, the company should earn about 4.50 dlrs a share. Next year, based on an average oil price of 18 dlrs a barrel, ARCO should earn about five dlrs a share. The company earned 3.38 dlrs a share in 1986. "If oil prices should rise to an average of 20 dlrs a barrel," he said, "ARCO could record earnings of 6.50 dlrs a share. Nowak said his increased estimates come after the company told analysts yesterday that its first quarter earnings will comfortably cover its quarterly dividend requirement of one dlr a share. Nowak said, "The company has done an outstanding job reducing expenses, and ARCO is poised to generate greater earnings power." He said first quarter earnings will likely exceed the company's expectations stated yesterday and be in the 1.15-1.20 dlr-a-share range.