Stocks Revive in Final Hour; Dow Gains 1.15
Stock prices arrested their slide Tuesday, fluctuating within a narrow range before rising slightly in the final hour.
The Dow Jones average of 30 industrials rose 1.15 points to close at 1,459.06.
There were about seven advancing issues for every six declining ones on the New York Stock exchange.
Volume on the Big Board was 109.69 million shares, against 103.53 million on Monday.
On Monday, the Dow Jones industrials had fallen 14.22 in their biggest one-day drop since Aug. 6. Analysts and traders said bargain hunters who bought stocks Tuesday were responsible for halting the decline.
The Dow industrial average hit a record 1,475.69 last Wednesday, the day before many traders took a long Thanksgiving weekend. Many analysts predict that the Dow average will resume its climb after a breather and surpass the 1,500 level around the end of the year.
Texaco Most Active Issue
Monday’s big sell-off was the first major drop in the Dow industrials in a steady rally that has added about 170 points to the average in 10 weeks.
The market dipped more than 3 points in the first 30 minutes of trading, then went more than 3 points ahead of Monday’s close by noon before settling into a narrow range the rest of the day.
Texaco was down 3/4 to 31 as the most active issue on the NYSE. More than 3 million shares changed hands.
A state judge in Texas is scheduled to decide Thursday whether to approve a jury’s verdict that Texaco should pay Pennzoil more than $10.5 billion in damages in connection with Texaco’s 1984 acquisition of Getty Oil.
Pennzoil was up 3 1/4 to 66 1/2. The company, responding to what it called numerous inquiries from analysts and reporters, denied rumors that it was holding talks with Texaco on an out-of-court settlement.
General Dynamics was down 1 3/4 to 66.
The company was indicted Monday along with four current or former executives on charges of conspiring to defraud the Department of Defense in connection with a contract to develop a prototype of the Army’s ill-fated Sgt. York air-defense gun system.
International Business Machines rose 3/4 to 138 5/8. Digital Equipment Corp., another leading high-technology stock, jumped 3 1/8 to 121 7/8.
Auto stocks rose, led by Chrysler Corp., up 1 3/8 to 43 5/8.
Most bond prices rose, recouping gains lost in the previous session. Short-term interest rates receded after their Monday spurt.
Analysts said the bond market rebounded partly on the belief that Monday’s pessimism was overdone.
The bond market suffered a setback Monday as traders became perplexed about the inability of Congress and the Reagan Administration to agree on ways to trim the federal budget deficit.
Also weighing on the market Monday was the perception that the Federal Reserve Board may not relax its monetary policy stance anytime soon.
Hopes for easier credit conditions, including a cut in the Fed’s discount rate, have been lifting spirits in the bond market recently. The discount rate, the fee the central bank charges on loans to commercial banks and savings institutions, has stood at 7.5% since May.
New economic statistics from the government generated scant reaction in the bond market.
In the secondary market for Treasury securities, prices of short-term governments rose from 1/16 point to 3/32 point, intermediate maturities rose from 5/32 point to almost 1/2 point and long-term issues were up about 1/2 point, according to the investment firm of Salomon Bros.
In corporate trading, industrials and utilities rose 1/8 point in light dealings.
