Computer, Technology Issues Push Market Up
Computer and technology issues set the pace as the stock market pushed ahead for the second straight session Wednesday.
The Dow Jones average of 30 industrials, up 0.22 on Tuesday, rose another 2.80 to 1,367.16, creeping near the record closing high of 1,369.29 that it reached last Thursday.
Other, broader measures, which remain well below their midsummer highs, generally showed better percentage gains in a fairly active session.
Volume on the New York Stock Exchange reached 121.65 million shares, up from 111.29 million on Tuesday.
Before the market opened, the government reported that new orders for durable goods fell 1.1% in September.
Seen as Positive News
However, the Commerce Department figures showed that the decline was due entirely to a drop in the volatile defense capital goods sector. Excluding that category, the department said, orders rose 0.7%.
As a result, Wall Streeters generally viewed the report as positive for the economic outlook.
Separately, the Labor Department said the consumer price index rose 0.2% in September. That was about in line with advance expectations on Wall Street.
Computer and technology issues were strong for the second straight day in the wake of a better-than-expected earnings report from Digital Equipment.
Digital gained 1 1/8 to 111 7/8, International Business Machines 1 3/8 to 130 1/2, Texas Instruments 1 3/4 to 94 1/2, Hewlett-Packard 1 to 31 3/8 and Data General 1 to 40 3/4.
Fireman’s Fund led the active list, trading at 27 3/4. A 1.56-million-share block changed hands at 26.
The stock came to market in a 32-million-share offering from American Express, which retains a 45% interest in the property-casualty insurance company.
Santa Fe Southern Pacific fell 5/8 to 32 1/2 in active trading. The Justice Department opposed on antitrust grounds the railroad merger that created the company in its present form.
Phibro-Salomon rose 5/8 to 37. The company reported third-quarter earnings of 94 cents a share, up from 83 cents in the comparable period last year.
Exxon rose 1/8 to 53 7/8 despite the company’s report of lower profits for the third quarter.
Munford Inc., which said its quarterly net fell to 22 cents a share from 48 cents in the like period a year ago, dropped 1 3/4 to 17.
Bond prices declined after climbing the previous session as dealers sifted through the new economic figures.
In addition, Maria Ramirez, with Drexel Burnham Lambert in New York, said traders are still awaiting resolution of the debt ceiling crisis.
The impasse in Congress over increasing the federal debt limit has cast a cloud of uncertainty over the credit markets. The Treasury has been forced to postpone many new debt issues recently because it lacks sufficient borrowing authority.
But once Congress finally raises the debt ceiling, the Treasury will reschedule auctions, and its huge financing needs will probably intensify upward pressures on interest rates, analysts say.
In the secondary market for Treasury securities, prices of short-term governments slipped between 3/32 to 1/8 of a point, intermediate maturities were unchanged to down 1/16 point and long-term issues were unchanged to down 3/32 point, according to the investment firm of Salomon Bros. 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 new issues, the Treasury sold $9.26 billion of two-year notes Wednesday at an average yield of 8.9%. It received $22.48 billion of bids. The average return was the lowest since 8.51% on June 19 and compares to 9.11% at the government’s most recent previous two-year note auction.
Treasury Indexes Decline
The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, declined 0.06 to 106.57. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, fell 1.03 to 1,118.20.
In corporate trading, industrials were unchanged and utilities went up 1/8 point in light trading.
Among tax-exempt municipal bonds, general obligations were down 1/2 point and revenue bonds were off in moderate activity.
Yields on three-month Treasury bills were up 1 basis points to 7.21%. Six-month bills rose 8 basis points to 7.38%, while one-year bills were up 2 basis points at 7.46%. A basis point is one-hundredth of a percentage point. Yields on 30-year Treasury bonds remained at 10.37%, unchanged from late Tuesday.
The federal funds rate--the interest on overnight loans between banks--traded at 8.375%, compared to 8.125% late Tuesday.
