Dow Jumps 19.97 After Early Drop : Blue Chip Rally Pushes Whole Market Out of Slump
The stock market posted solid gains Tuesday on the strength of blue chip issues, recovering most of the losses from the previous session.
The Dow Jones average of 30 industrials closed at a session-high 19.97 to 2,280.09 after slipping 7.87 in the first half hour of trading.
Gainers outpaced losers by about five to three on the New York Stock Exchange, with 995 up, 599 down and 400 unchanged. Big Board volume totaled 174.76 million shares, compared to 165.43 million on Monday.
Analysts said a rise in blue chip issues, particularly that of computer giant IBM, pushed the market out of an opening slump and kept stock prices higher throughout the session.
Among the most actively traded issues on the NYSE, IBM was up 4 to 142 7/8, American Express rose 2 1/8 to 79 and American Telephone & Telegraph was up 5/8 to 23 3/4. Analysts said investment recommendations from brokerage firms helped lift IBM and American Express stock.
Takeover stocks were on the NYSE active list.
Chrysler was up 7/8 to 54 3/4 and American Motors rose 1/8 to 4 3/8. Chrysler announced Monday that it agreed to acquire Renault’s controlling stake in AMC. That paves the way for a takeover of AMC.
Caesars World Advances
Caesars World was up 3/4 to 28 1/2. Martin T. Sosnoff, a New York money manager and Caesars’ biggest shareholder, has offered to buy the company for $28 a share.
Supermarkets General fell 5/8 to 41 1/8. Dart Group said it had made a $41.75-a-share bid for the company.
Large blocks of 10,000 or more shares traded on the NYSE totaled 3,551, compared to 2,911 Monday.
In the bond market, prices eased slightly in some of the most sluggish trading of the year.
The federal funds rate was trading at 6,188%, the same as Monday.
The Treasury’s key 30-year bond lost about 90 cents per $1,000 in face amount, and its yield rose to 7.53% from 7.51% late Monday.
In the secondary market for Treasury bonds, prices of short-term governments fell 1/32 point, intermediate maturities fell about 1/8 point and long-term issues slipped 3/32 point, Salomon Bros. said.
The movement of a point is equivalent to a change of $10 in the price of a $1,000 bond.
In corporate trading, industrials and utilities were unchanged to off point in light dealings. Among tax-exempt municipal bonds, general obligations fell point and revenue bonds were unchanged. Trading was quiet.
Yields on three-month Treasury bills were up 2 basis points to 5.66%. A basis point is one-hundredth of a percentage point. Six-month bills rose 2 basis points to 5.62% and one-year bills were up 3 basis points at 5.72%.
