Blue-Chip Stocks Lead Market Rally; Dow Index Jumps 18.42
The stock market closed out a week of uneven gains with a rally Friday, renewing its bid to recover from its early July slump.
The Dow Jones average of 30 industrials climbed 18.42 to 1,810.04, extending its advance for the week to 32.06 points.
Volume on the New York Stock Exchange came to 131.96 million shares, against 134.71 million on Thursday.
The Dow Jones industrial average’s rise was its biggest since it jumped 23.68 points on June 20. But broader market measures showed a bit less strength, and brokers said the day’s volume figures were not at all impressive.
Nevertheless, analysts said investors seemed to be growing increasingly confident that the worst of the selling pressure that set in early this month was over.
The drop of 122.89 points in the Dow over a two-week stretch was attributed in large measure to concern that economic growth was still sluggish and might slow further. The most recent statistics, however, have suggested that circumstances are not all that bad.
Larry Speakes, the White House spokesman, said Friday that the Reagan Administration expects the growth rate for 1986 to be less than 4% but that it looks for greater than 4% expansion in 1987.
Hammermill Paper climbed 5 3/8 to 53 3/4. A group led by investor Paul A. Bilzerian announced a $52-a-share tender offer for the company late Thursday.
Allied Signal gained 3 to 42. The company denied reports that it was about to announce a restructuring plan.
Safeway Stores rose 1 7/8 to 61 7/8. Dart Group, which is attempting to take over the company, said it had been told that Safeway would consider a bid from a third party.
Santa Fe Southern Pacific fell 1/2 to 27 1/2 in active trading on top of a 2-point drop Thursday, when the Interstate Commerce Commission ruled against the proposed merger of the Santa Fe and Southern Pacific railroads within the parent holding company.
Ford Motor added 1 to 57, trading at new highs. On Thursday, the company reported record earnings for the second quarter.
Western Union dropped 3/4 to 4 as the company’s debt and preferred stock issues came under selling pressure. Analysts noted that lower-rated, high-yielding bonds have been hit with selling since LTV Corp.’s filing last week for Chapter 11 protection under the U.S. Bankruptcy Code.
Gainers Top Losers
In the overall tally on the Big Board, advancing issues outnumbered declines by about five to three.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 158.53 million shares.
Standard & Poor’s index of 400 industrials rose 2.60 to 265.32, and S&P;’s 500-stock composite index was up 2.27 at 240.22.
Large blocks of 10,000 or more shares traded on the NYSE totaled 2,484, compared to 2,636 on Thursday.
Bond prices drifted lower in light trading and short-term interest rates inched higher.
Traders were hesitant to make any large transactions because of the prospect of a new round of federal borrowing within the next two weeks, analysts said.
Maria Ramirez, financial economist for the investment firm Drexel Burnham Lambert, said she expects that the Treasury Department will raise as much as $30 billion at the August refunding.
The amount and timing of the sale are expected to be announced next week.
Bond prices moved generally lower this week as traders speculated that the Federal Reserve is unlikely to take immediate steps to encourage lower interest rates.
Treasury Issues Dip
In the secondary market for Treasury securities, prices of short-term governments were unchanged, intermediate issues fell by between 1/32 point and 12/32 point and long-term issues were off by between 5/32 point and 12/32.
