Market Rallies as U.S. Completes Refunding
The stock market posted its first clear-cut gain in a week Thursday as the Treasury completed its quarterly sale of new bonds and notes.
The Dow Jones average of 30 industrials rose 4.82 to 1,329.86, rebounding from its 30.58-point decline over the four previous sessions.
Volume on the New York Stock Exchange came to 102.87 million shares, against 100.04 million on Wednesday.
Traders Encouraged
Analysts said some traders were encouraged by the reception investors gave the offering of $21.75 billion in government securities this week.
With the refunding out of the way, analysts said, investors are likely to turn their attention back to the outlook for economic growth and corporate profits.
There has been widespread talk of a pickup in the pace of business activity beginning before summer’s end. But doubts persist about how strong and durable such a revival might prove to be.
Regional telephone issues were strong, responding to reduced concerns about the interest-rate outlook.
Pacific Telesis gained 1 5/8 to 74 3/8, Nynex rose 1 to 82 3/8, Bell Atlantic climbed 1 1/8 to 88 5/8, U.S. West rose 1 to 78, Ameritech rose 1 5/8 to 89 1/8 and Southwestern Bell gained 2 1/8 to 81.
Trans World Airlines rose to 22. Financier Carl C. Icahn, who is bidding to acquire the company in spite of its previous merger agreement with Texas Air, reported Wednesday that he owns more than 45% of TWA’s stock.
Pan Am led the active list, up 5/8 at 8 1/8 in trading that included a 1.2-million-share block at 7 3/4. Other airline stocks were fractionally higher.
Changes in Management
Beatrice Cos. climbed 1 3/8 to 34 1/2. The stock has been strong since the company announced changes in top management last weekend.
Harper & Row, which declared a 3-for-2 stock split and said it planned a dividend increase, added 1 3/4 to 30 1/2.
Mary Kay Cosmetics recovered slightly from a two-day dive that its officers partially attributed to RepublicBank Dallas’ pull-out from financing a leveraged buy-out of the company. The stock closed at 11 1/8, up 1/2, but still down from Monday’s 12 1/2.
Retailing stocks were mixed with small price changes as leading companies in the industry reported generally weak sales for July. Sears, Roebuck rose to 35 3/8, K mart slipped 1/8 to 34 3/8 and J. C. Penney was down 1/8 at 49 1/8.
Advancing issues outnumbered declines by more than two to one on the Big Board, and the exchange’s composite index rose 0.82 to 109.40.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 123.46 million shares.
Standard & Poor’s index of 400 industrials gained 1.02 to 210.22, and S&P;’s 500-stock composite index was up 1.27 at 188.95.
The NASDAQ composite index for over-the-counter stocks rose 0.52 to 298.72. At the American Stock Exchange, the market-value index closed at 232,50, up 1.99.
The Wilshire index of 5,000 equities closed at 1,954.285, up 13.008.
Large blocks of 10,000 or more shares traded on the NYSE totaled 2,068, compared to 1,970 on Wednesday.
Bond prices rose and short-term interest rates were little changed as the Treasury completed its refunding operation. The current refunding drew particular attention in the credit markets because of the dollar’s recent decline. There were fears that, with a lower dollar, foreign demand for dollar-denominated securities might not be as robust as in earlier sales.
Met Expectations
The Federal Reserve, meanwhile, said the nation’s basic money supply expanded by $1.3 billion in the week ended July 29--an increase that generally met credit analysts’ expectations.
In the secondary market for Treasury bonds, prices of short-term governments rose 2/32 point, intermediate maturities were up 10/32 point and long-term issues gained 14/32 point, according to the investment firm of Salomon Bros. The movement of a full point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.
The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, gained 0.18 to 105.34. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, rose 1.86 to 1,106.74.
In corporate trading, industrials and utilities edged up 1/8 point in light trading, Salomon Bros. said.
Bonds Little Changed
Among tax-exempt municipal bonds, both general obligations and revenue bonds were little changed, also in light activity.
Yields on three-month Treasury bills, meanwhile, were up 2 basis points to 7.21%. Six-month bills were unchanged at 7.43%, and one-year bills slipped 1 basis point to 7.56%.
Yields on 30-year Treasury bonds fell to 10.66% from 10.71% late Wednesday.
The federal funds rate, the interest on overnight loans between banks, traded at 7.75%, up from 7.625% late Wednesday.
