Good Economic News Aids Stocks; Dow Up 6
The stock market put together a broad advance Friday in response to encouraging news on the economic outlook.
The Dow Jones average of 30 industrial stocks rose 6.07 to 1,266.78, cutting its loss for the week to 0.67 points.
Volume on the New York Stock Exchange reached 101.35 million shares, against 99.78 million Thursday.
Before the market opened, the government reported that the index of leading economic indicators rose 0.7% in February. The increase in the index, which is designed to detect future economic trends, was larger than had been envisioned in most advance estimates on Wall Street.
In addition, market watchers said, it appeared to be just about where investors wanted it to be--neither high enough to raise fears of upward pressure on interest rates nor low enough to aggravate worries about a slowing in the pace of business activity.
To give the market another boost, there was the Federal Reserve’s report late Thursday of a $500-million decline in the basic measure of the money supply for the week ended March 18. Interest rates fell in the credit markets as that news came out.
Auto Issues Fall
With all that, however, analysts said investing institutions still seemed intent on selling some blue-chip issues before making their reports for the first quarter.
In the auto group, for example, General Motors dropped 7/8 to 73 and Ford Motor 1 to 42 3/8.
The companies are faced with the prospect of stepped-up competition from Japanese manufacturers, who plan to increase shipments of cars to this country with the expiration this weekend of voluntary import quotas.
Sea-Land tumbled 4 1/8 to 19 3/4 after the company projected sharply lower first-quarter earnings. Among other companies in the container-shipping business, shares of American President dropped 4 5/8 to 34 and Sea Containers Ltd. lost 1 3/4 to 37.
In the plus column, Mohasco picked up 2 to 31 1/2. A Miami investment firm proposed to acquire the company for $32 a share.
Unocal rose 7/8 to 50 3/8 and led the active list on volume of more than 2.1 million shares.
The stock climbed 2 1/8 points Thursday when an investment group headed by T. Boone Pickens, chairman of Mesa Petroleum, said it was considering seeking to gain control of the company or to restructure it.
In the daily tally on the Big Board, about two issues rose in price for every one that lost ground. The exchange’s composite common-stock index gained 0.62 to 104.60.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 121.91 million shares.
Standard & Poor’s index of 400 industrials rose 1.24 to 201.67, and S&P;’s 500-stock composite index was up 1.12 at 180.66.
The NASDAQ composite index for the over-the-counter market added 1.03 to 279.20.
At the American Stock Exchange, the market-value index closed at 229.59, up 1.49.
The Wilshire index of 5,000 equities closed at 1,859.766, up 11.265.
Bond Prices Rise
Large blocks of 10,000 or more shares traded on the NYSE totaled 2,057, compared to 2,046 on Thursday.
Most bond prices rose in moderate trading, extending Thursday’s sharp gains.
Yields on 30-year Treasury bonds fell to 11.64% from 11.68% late Thursday.
In the secondary market for Treasury bonds, prices of short-term governments were unchanged to up 1/32 point, intermediate maturities rose 2/32 point to point and long-term issues rose 1/2 point to 5/8 point, according to the investment firm of Salomon Bros. Inc.
The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.
In corporate trading, industrials and utilities rose 3/8 point.
Among tax-exempt municipal bonds, general obligations and revenue bonds were up 3/4 point.
Yields on three-month Treasury bills rose 5 basis points to 8.16%. Six-month bills rose 5 basis points to 8.55%, and one-year bills were up 2 basis points at 8.74%.
A basis point is one-hundredth of a percentage point.
The federal funds rate, the interest on overnight loans between banks, rose sharply in early trading but ended the day at 8.25%, against 8.50% late Thursday.
