STOCKS: Dow Rises 8.62 : Stocks Manage a Mild Rally; Dow Rises 8.62
Stock prices staged a mild rally Wednesday near the close of a sluggish late-summer session.
A few blue chips involved in corporate restructurings and stock repurchases led the advance.
The Dow Jones average of 30 industrials rose 8.62 to 1,331.09.
Volume on the New York Stock Exchange stepped up to 88.53 million shares from 82.14 million Tuesday.
A big chunk of the Dow’s gain was accounted for by Westinghouse Electric, which jumped 4 3/4 to 38 on news that the company plans to buy back as many as 25 million of its shares and is considering selling its cable-television business.
The average also got a lift from Union Carbide, up 7/8 at 55 5/8 on volume of more than 4.6 million shares. The company announced a broad restructuring plan that includes the repurchase of as many as 10 million of its shares.
Vacation Impact
Otherwise, analysts said it was difficult to read much significance into the market’s meanderings, with many investors on vacation or waiting until after Labor Day to get a better reading of the pace of the economy.
Many optimists in the financial world base their case on an expected pickup in business activity through the rest of the year and possibly into 1986. In the skeptical camp, analysts argue that those hopes might not be fulfilled, leaving the market vulnerable to a letdown.
Alhough the week before Labor Day has traditionally been a quiet one in the markets, it also has often produced some gains in stock prices as traders look ahead to the “business New Year.”
For that pattern to hold this time around, analysts say, it would be helpful if the government’s index of leading economic indicators carries a positive message when it is reported Friday.
General Public Utilities rose 1 to 14 1/2. On Tuesday, a federal appeals court upheld a regulatory decision to allow the company to restart its undamaged nuclear reactor at Three Mile Island.
ITT gained 1/2 to 33 7/8 in brisk trading. The company said it knew of no explanation for the activity.
Uniroyal dropped to 21 on word that government regulators plan to bar the use of an agricultural chemical produced by Uniroyal to promote the growth of apples.
Prices were mixed in the bond markets as yields at the Treasury’s note auction fell to a 7 1/2-year low. The Treasury Department sold $7.25 billion in five-year, two-month notes Wednesday.
The Treasury said the average annual yield at its quarterly note auction was 9.62%, down from 9.95% at the previous sale of a similar issue in May. It was the lowest average for such an issue since the 7.94% of March, 1978.
The Treasury said $23.39 billion in bids were submitted, or more than three times the size of the offering.
In the secondary market for Treasury securities, however, intermediate maturities fell point from Tuesday’s late prices, according to Salomon Bros. Prices move in the opposite direction of interest rates.
Short-term Treasury bonds slipped between 1/32 point and 1/8 point and long-term issues finished down between 1/32 point and 6/32 point. The movement of a point is equivalent to a $10 change 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, edged down 0.14 to 106.62. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, fell 1.13 to 1,118.93.
