Stocks Rise in Active Trading; Dow Up 0.22
Stock prices moved higher in active trading Tuesday, although the Dow Jones industrial average posted only a slight gain.
Computer issues paced the upswing, as did telephone, drug and financial stocks.
The Dow Jones average of 30 industrials briefly traded above its record closing high of 1,369.29, but it slipped in the final hour and closed with only a 0.22-point gain at 1,364.36.
The blue-chip average masked the advance in the broader market. Gainers outpaced losers by three to two on the New York Stock Exchange, whose composite index rose 0.60 to 108.65.
Big Board volume swelled to 111.29 million shares from 95.68 million on Monday.
Prices opened mixed, with some brokers saying a pullback was likely following the market’s strong performance last week, when the Dow Jones industrial average established its record.
The market turned mostly higher by mid-session, however, bolstered by a stronger bond market, continued takeover activity and an encouraging earnings report from Digital Equipment, which sparked a rally in computer stocks, analysts said.
Treasury Bonds Climb
Prices of long-term Treasury bonds climbed 1/2 point, or $5 for each $1,000 in face value, despite the continued congressional debate over raising the nation’s debt ceiling, which has forced the Treasury to postpone major sales of new notes and bonds.
As bond prices rise, their yields fall, which helped spur demand for interest-rate-sensitive financial issues, traders said.
H. F. Ahmanson climbed 1 to 34 3/4, BankAmerica gained 3/8 to 13 3/4 and Travelers rose 3/4 to 43 1/2.
“Today marked one of the better performances we’ve seen by the broader market in several weeks,” said Michael Metz, technical analyst at Oppenheimer & Co. But he said Wall Street remains concerned that a slowdown in consumer spending could preclude a vigorous rebound in the economy within the next few months. As a result, “there’s no conviction about corporate earnings estimates for the fourth quarter and 1986,” Metz said.
General Motors said its net income rose 24% in the third quarter from a year earlier, but its stock dropped 1 1/8 to 67 3/8. Chrysler rose 3/4 to 38 3/8 and Ford Motor edged up 1/8 to 47 1/2.
Digital Equipment said its fiscal first-quarter profit fell from a year earlier. But traders said the latest results exceeded industry forecasts, and Digital’s stock jumped 4 5/8 to 110 3/4.
