Dow Index Gains 6.39 in Broad Market Rally
The stock market rallied Thursday, recovering some of its losses from a sharp decline earlier in the week.
The Dow Jones average of 30 industrials gained 6.39 points to close at 1,306.79.
Gainers took a two-to-one lead over losers among New York Stock Exchange-listed issues.
“The broader market is doing quite well today,” said Newton D. Zinder of E. F. Hutton. “It’s basically a technical rally. We had gotten quite oversold in the recent decline. Sentiment among traders had turned more bearish, and that is a signal that a rally is impending.”
Zinder added, “It has probably not yet run its course.”
Strength Understated
The Dow Jones average, which shed almost 11 points on Tuesday, understated the market’s strength on Thursday, he said.
The index was pulled down by General Foods, which was off 4 at 84 3/4. Rumors had it that possible suitor Philip Morris has turned its interest from General Foods to Pillsbury, which was up 1 at 59. Philip Morris was down 5/8 at 77.
Technology stocks jumped. Digital Equipment was up 3 3/8 at 108 and Burroughs was up 1 7/8 at 65.
Other notable gainers were Upjohn, up 2 at 106, and Hutton, up 2 3/8 at 36 on rumors that it was a takeover target. Sanford Weill, former president of American Express, and Lewis Glucksman, chairman of Lehman Bros. before it was acquired by American Express, were rumored to be joining forces to make a bid.
The volume leader on the Big Board was Richardson-Vicks, which was down 2 at 47. A federal judge issued a restraining order against the company’s planned preferred stock. That stock was to be used as part of a takeover defense against hostile bidder Unilever.
Other active stocks were Citicorp, up at 41 3/8; IBM, up at 127 3/4; AT&T;, up 5/8 at 21 1/2, and American Express, up 1 1/8 at 41 3/4.
On the economic front, the Commerce Department reported that consumer spending rose 1.2% in August for the best gain since April.
A car-buying spree fueled the surge, which far outstripped a modest 0.3% rise in personal income in August, also reported by the department. That left the personal savings rate at a record low 2.8%.
Big Board volume totaled 100.32 million shares, against 105.71 million Wednesday. The NYSE’s composite index rose 1.00 to 106.00.
At the American Stock Exchange, the market-value index was up 1.64 at 222.62.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 118.2 million shares.
Large blocks of 10,000 or more shares traded on the NYSE totaled 1,962, compared to 2,099 on Wednesday.
Standard & Poor’s index of 400 industrials rose 1.81 to 204.39, and S&P;’s 500-stock composite index was up 1.68 to 183.39.
The Wilshire index of 5,000 equities closed at 1,887.624, up 17.784 from Wednesday.
Bond Prices Mostly Higher.
The NASDAQ composite index for the over-the-counter market closed at 283.59, up 2.55.
In the bond market, prices moved mostly higher, extending their gains after the Federal Reserve Board’s late-afternoon report of a $3.7-billion rise in the nation’s basic money supply in early September. The report was in line with analysts’ expectations.
In the secondary market for Treasury bonds, prices of short-term governments rose 5/32 point, intermediate maturities rose between point and 1/2 point, and long-term issues were up between 3/8 point and 5/8 point, according to Salomon Bros.
