Market Posts Broad Gains; Dow Climbs 11
The stock market staged a broad advance Friday, rebounding from its decline in the first session of 1986.
The Dow Jones average of 30 industrials, down 8.94 on Thursday, jumped 11.47 to 1,549.20, finishing the week with a net gain of 6.20 points.
Volume on the New York Stock Exchange came to 105.03 million shares, against 98.96 million on Thursday.
Analysts said there was no ready explanation for the market’s recent erratic gyrations. Volume has been light through the past couple of weeks, which have been broken up by the Christmas and New Year’s holidays. During that time, the market has been hit by periodic spells of selling as investors seek to cash in on 1985’s strong gains.
Each time prices fell, however, they appeared to attract new buyers who had been waiting for a chance to get in on the rally that began last September.
Brokers said some traders were buying stocks Friday on the hope that the market will resume its advance next week, when holiday vacationers return and Wall Street is back on its usual schedule.
Union Carbide gained 1 3/4 to 75. On Thursday, GAF raised its offer to acquire the company’s stock from $74 a share to $78 a share. Carbide countered with a series of moves, among them a plan to sell its wide-ranging consumer businesses. GAF shares, down more than a point at mid-session, rallied near the close to show a gain of 2 at 55.
Auto issues were mixed as domestic car manufacturers posted generally sluggish sales figures for the mid-December selling period. General Motors rose 3/4 to 71 5/8 and Chrysler added 3/8 to 46, but Ford Motor was down 3/8 at 57 1/8.
Elsewhere among the blue chips, International Business Machines picked up 2 3/8 to 154 3/8, Merck 2 1/2 to 140 1/2 and Exxon 1/2 to 55. However, McDonald’s dropped 7/8 to 78 3/8 and General Electric was off 1/8 at 71 3/4.
Airline issues fell amid signs of intensified fare competition in the industry. UAL dropped 1 1/2 to 48 3/4, AMR 1 1/8 to 40 and Delta 5/8 to 38 5/8.
Bond prices generally were lower in quiet trading, although tax-exempt municipal bonds edged higher in moderate to active trading.
The credit markets ignored a report by the Federal Reserve Board that the nation’s basic money supply, known as M1, rose by $5.3 billion in mid-December.
“The street has learned over the past several months that M1 matters less to the Fed now than it did at another time,” said Ray Stone, manager of financial economics for Merrill Lynch Capital Markets. “It just wasn’t viewed as significant.”
