Stocks Manage Small Gain; Dow Climbs 5.76
The stock market squeezed out a small gain Monday in a quiet session dominated by takeover news and conjecture over interest rates.
The advance came despite some early selling prompted by uncertainty about the outlook for interest rates.
The Dow Jones average of 30 industrials, after showing a small loss for most of the day, closed with a 5.76 gain at 1,892.29.
Volume on the New York Stock Exchange tailed off to 120.22 million shares from 142.30 million on Friday.
Analysts noted that questions about interest rate prospects had been dogging the market for some time amid evidence that the pace of business activity was picking up.
Those doubts intensified late Friday when the Federal Reserve suggested that it might shift to a tighter credit policy soon.
In the minutes of its September meeting, the policy-setting Federal Open Market Committee indicated that it felt a slight tightening would be warranted if some measures of the money supply keep growing at their recent rates.
Interest rates rose in the credit markets in late activity Friday. But in Monday’s session, they dropped back a bit, surprising observers who had expected to see them come under greater upward pressure.
As the pace of trading tapered off, Wall Streeters were looking ahead to an even quieter day today. The stock market will be open, but the government securities market and many individual businesses will be closed for Veterans Day.
Among stocks in the spotlight Monday, E. F. Hutton dropped 2 3/8 to 46 after preliminary merger talks between the company and Shearson Lehman Bros. broke off.
Wickes, involved in two takeover deals, climbed to 4 3/4 as the most active American Stock Exchange issue.
Collins & Aikman, traded on the NYSE, jumped 14 1/2 to 52 1/2 after Wickes said it agreed to a friendly takeover of Collins & Aikman for $53 a share. Meanwhile, Lear Siegler rose 1 3/4 to 92. Wickes said it had acquired a 9.8% stake in Lear Siegler and plans to propose a merger.
Harris Corp. gained 2 5/8 to 33 3/8 on takeover talk. The company said it knew of no reason for the activity in its shares.
Borg-Warner, also discussed as a possible takeover candidate, added 2 to 41.
In the overall tally on the Big Board, advancing issues outnumbered declines by about seven to six.
Large blocks of 10,000 or more shares traded on the NYSE totaled 2,247, compared to 2,803 on Friday.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 147.42 million shares.
Standard & Poor’s index of 400 industrials rose 0.51 to 273.81, and S&P;’s 500-stock composite index was up 0.36 at 246.13.
In the bond market, the bellwether 30-year U.S. Treasury bond rose by $5 per $1,000 in face value, with its yield declining to 7.62% from 7.66% late Friday.
Trading was quiet.
In secondary trading of Treasury issues, prices of short-term governments were up about 7/32 point, intermediate issues were up by between 10/32 point and 3/4 point and long-term issues were up 1/2 point, according to the investment firm of Salomon Bros.
In corporate trading, industrials and utilities were up 1/8 point in quiet trading. Among tax-exempt municipal bonds, general obligations rose point and revenue bonds were down point in light dealings.
Yields on three-month Treasury bills were off 3 basis points to 5.41%. Six-month bills fell 4 basis points to 5.51%.
