Market Manages Small Gain; Dow Climbs 2.67
The stock market pieced together a very small gain Wednesday as traders studied the latest government statistics on the pace of the economy.
The Dow Jones average of 30 industrials, which had fallen 31.36 points in the week’s first two sessions, edged up 2.67 to 1,808.35.
Volume on the New York Stock Exchange came to 113.99 million shares, against 110 million on Tuesday.
Before the opening, the Commerce Department reported that the gross national product grew at a 2.4% annual rate, after adjustment for inflation, in the third quarter.
The figure was about in line with advance estimates on Wall Street. Analysts said it didn’t provide much conclusive evidence that business activity was picking up sustained momentum.
The government data also showed inflation running at a 3.6% annual rate in the July-September period, as measured by an index known as the GNP deflator.
That was a bit higher than Wall Street had expected, and analysts said it prompted caution among both bond and stock traders.
American Bakeries jumped 10 1/8 to 44 3/4, recording the day’s best percentage gain among NYSE issues. A new company formed by American Bakeries’ chairman and chief executive offered to buy it for $43 a share.
Blue Chips Mixed
General Motors rose 7/8 to 68 3/8. The company reported sharply lower third-quarter earnings, but analysts said the news had been widely anticipated by investors over the past few weeks.
Elsewhere among the blue chips, RJR Nabisco gained to 50, and Eastman Kodak rose 1 1/8 to 57 3/8. But International Business Machines lost 1 to 120 3/8, and United Technologies was down 1 5/8 at 40.
United Technologies said that restructuring moves over the last two years would affect near-term earnings adversely but that it believed those steps improved its longer-term prospects.
USX dropped 3/8 to 26 in active trading. USX said its chairman, David M. Roderick, had met with financier Carl C. Icahn to discuss Icahn’s bid to acquire the company.
H&R; Block climbed 1 1/2 to 47 3/8, hitting a new 52-week high. In his morning market commentary, Phil Roth, technical analyst at E. F. Hutton, said the stock “broke out on the upside” Tuesday. “Confusion abounds about the impact of the tax law revisions, a negative for a lot of stocks,” Roth said. “But perhaps this is a plus for H&R; Block.”
In the overall tally on the Big Board, advancing issues slightly outnumbered declines, with 768 up, 720 down and 478 unchanged.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 138.67 million shares.
More Block Trades
A total of 2,412 blocks of 10,000 or more shares traded on the NYSE, compared to 2,028 blocks on Tuesday.
Bond prices rose after dropping sharply early in the day on the GNP report.
The move upward came on lower oil prices and in response to a two-year note sale by the Treasury Department.
The yields on the notes edged down to 6.39% from 6.44% at the last auction on Sept. 23. The latest level is the lowest since 6.21% on Aug. 20.
The Treasury’s key 30-year bond was up about $5 per $1,000 in face amount at the end of the day, yielding 7.78%, compared to 7.83% late Tuesday. Shorter-term issues showed smaller gains.
In corporate trading, industrials were up 1/2 point and utilities rose 3/4 point in active dealings. Among tax-exempt municipals, general obligations and revenue bonds rose 3/8 point. Trading was light to moderate.
The federal funds rate, the interest on overnight loans between banks, traded at 7%, up sharply from 5.75% late Tuesday.
