Advertisement

Dow Up 26.57 as Interest-Rate Hopes Mount : Bond Prices Also Gain; News From Japan Cited

Share via
From Times Wire Services

The stock market chalked up a solid gain in heavy trading Thursday, propelled by hopes for lower interest rates and some favorable economic news.

The Dow Jones average of 30 industrials climbed 26.57 to 1,878.37, stretching its gain since the start of the week to 46.11 points.

Volume on the New York Stock Exchange reached 194.22 million shares, the seventh highest ever, against 164.43 million on Wednesday. The record for a single session of 240.49 million shares was set Sept. 12.

Advertisement

Analysts said that one catalyst for the advance was provided by reports that Japan might soon cut its discount rate. The Japanese stock market posted a record-breaking gain, and interest rates fell in the U.S. credit markets.

Should Japanese interest rates decline, they would logically exert a downward influence on rates in this country, as well.

Other Cheering News

Another plus was the Commerce Department’s report of a smaller-than-expected U.S. merchandise trade deficit last month.

Advertisement

Still another factor setting the tone for the markets, with an immediate impact that was less clear, was the surprise ouster of Sheik Ahmed Zaki Yamani as Saudi Arabia’s oil minister.

Energy issues were broadly higher as word came that Yamani’s successor, Hisam Nazer, called for an emergency meeting of the pricing committee of the Organization of Petroleum Exporting Countries. Amoco gained 2 3/8 to 65, Atlantic Richfield rose 2 1/8 to 55 5/8, Chevron rose 2 3/8 to 43 5/8, Occidental Petroleum was up 1 1/2 to 29 5/8 and Exxon rose 1 7/8 to 67 5/8.

Among other blue chips, International Business Machines rose 1 1/8 to 122, American Telephone & Telegraph rose 3/4 to 25, Eastman Kodak rose 1/2 to 60 3/4, International Paper rose 2 to 71 3/4 and RJR Nabisco rose 7/8 to 53.

Advertisement

Brokerage Stocks Rise

Securities-industry stocks also did well. Morgan Stanley climbed 6 1/8 to 76 7/8, First Boston rose 3/4 to 50, and Salomon Inc. rose 1 3/8 to 42 1/8. But E. F. Hutton Group, which had risen sharply of late on takeover speculation, dropped back 1 3/4 to 50.

Zale Corp. jumped 11 to 44. The company is the subject of a $50-a-share takeover offer from Peoples Jewellers and Swarovski International Holding.

Lucky Stores slipped 1/2 to 33 3/4. Asher B. Edelman, a New York investor, withdrew a $37-a-share takeover bid that had been opposed by the company.

West Point-Pepperell, which reported sharply higher quarterly earnings, gained 2 1/8 to 51 7/8.

In the overall tally on the Big Board, advancing issues outnumbered declines by more than two to one.

Large blocks of 10,000 or more shares traded on the NYSE totaled 4,068, compared to 3,520.

Bond prices rallied strongly in heavy trading Thursday but then gave up some of their gains.

Advertisement

Treasury Prices

The price of the Treasury’s bellwether 30-year issue rose more than $8.75 for each $1,000 in face value as its yield fell to 7.61% from 7.69% on Wednesday. At midday, it was up more than $12.50.

In the secondary market for Treasury bonds, prices of short-term governments gained 1/8 point, intermediate maturities rose 17/32 point and long-term issues were up 5/8 point, according to the investment firm of Salomon Bros.

Advertisement