Stocks Drift in Narrow Range; Dow Gains 0.23
Stock prices drifted in a narrow range Wednesday as traders studied some stronger-than-expected news on the economy.
The Dow Jones average of 30 industrials was up 0.23 to 1,439.22 at the close.
Volume on the New York Stock Exchange slowed to 105.10 million shares from 126.14 million on Tuesday.
Before the market opened, the Commerce Department reported that the gross national product grew at a 4.3% annual rate in the third quarter after adjustment for inflation. Last month, GNP growth for the third quarter had been estimated at 3.3%.
The upward revision surprised many analysts on Wall Street. But it was not taken as an unequivocal plus for the economic outlook or the stock market.
For one thing, some observers said, the details of the report suggested that business inventories were higher than previously thought, raising the prospect of sluggish production activity in the current quarter and perhaps in early 1986.
A Possible Negative
For another, the brisk pace of activity was seen as a possible negative for future declines in interest rates. In the credit markets Wednesday, rates were mixed with only small changes.
Texaco led the NYSE’s most active list, declining 1 1/2 at 34 3/4 on top of a 3-point drop Tuesday, when a jury ruled that the company must pay more than $10 billion in damages to Pennzoil Co.
Pennzoil shares gained 5/8 to 58 1/8.
Allied-Signal dropped 2 3/4 to 45 7/8 in active trading. The company said it planned to spin off about 30 of its operations as a separate company and to restructure its other businesses.
Eastman Kodak, which projected “solid” increases in sales and earnings for 1986, rose 1 to 47.
Japanese issues were strong, with Sony up 1/2 at 19 3/8 and Kyocera up 2 at 41 1/2. Stocks of Japanese companies have been a popular “play” of late on declines in the value of the dollar against the yen.
In the bond market, prices finished higher, recovering ground lost early in the session, while some long-term interest rates continued their recent descent.