Dow Advances 12.64, Nudges 2,300 : Traders Shake Off ‘Witching Hour’ Fears, Join Late Rally

The stock market pushed ahead to new highs Thursday, leaving the Dow Jones industrial average just shy of the 2,300 mark at the close.

Trading slowed a bit, however, as investors awaited the quarterly “triple-witching hour” today.

The Dow Jones average of 30 industrials climbed 12.64 to 2,299.57, stretching its gain during the past three sessions to 51.13.

Volume on the New York Stock Exchange totaled 166.12 million shares, down from 198.14 million Wednesday.

The session got off to a sluggish start as traders looked ahead to today and the last trading in a set of options and futures on stock indexes that are used by professionals in computer-program trading.

For several days, Wall Streeters have been debating whether this witching hour will produce the kind of volatility in stock prices that has occurred on several similar occasions in the past.

Some analysts argue that this one won’t be as stormy as others have been. Late in Thursday’s session, investors apparently concluded that the perils of the witching hour were outweighed by the prospective rewards of joining in a market rally that has been running with few interruptions since the start of 1987.

Five minutes before the close, the Dow stood at about 2,301, but then it slipped below 2,300 again.

Securities industry stocks were strong, buoyed by word that American Express had reached a preliminary agreement for Nippon Life Insurance Co. of Japan to buy a 13% interest in its Shearson Lehman Bros. subsidiary. American Express shares climbed 1/8 at 78 3/4 after trading as high as 80.

Elsewhere in the group, Merrill Lynch rose 2 1/2 to 45; Morgan Stanley gained 4 to 74 7/8; A. G. Edwards advanced 2 5/8 to 38 1/8; L. F. Rothschild, Unterberg, Towbin added 1 1/8 to 14 3/8, and First Boston gained 1 to 51. Salomon Inc. was down at 41 1/2.

Some technology issues also did well. Hewlett-Packard advanced 2 to 60, Computer Sciences climbed 1 1/2 to 54, Automatic Data Processing gained 1 7/8 to 47 5/8, Texas Instruments rose 2 1/2 to 172 and Motorola advanced 1 3/4 to 56 1/8.

Time Inc. added 1 to 90 1/8. The company said it plans to make a cash offer soon to buy back $150 million in notes due in 1992.

Blocks of 10,000 or more shares traded on the NYSE totaled 3,351, compared to 4,194 Wednesday.

The Wilshire index of 5,000 equities closed at 2,957.779, up 10.425 or 0.35%, from Wednesday.

In the credit markets, bond prices finished little changed in subdued trading, continuing a pattern that has prevailed for weeks.

The Treasury’s closely watched 30-year bond slipped 1/32 point, or about 30 cents for every $1,000 in face value. Its yield held steady at 7.51%, the same as Wednesday.

Prices of corporate and municipal issues were flat to lower.

In the secondary market for Treasury bonds, prices of short-term government issues were up 1/32 point, intermediate maturities slipped 1/16 point and 20-year issues were down 1/32 point, according to Salomon Bros.

In corporate trading, industrials were unchanged and utilities fell 1/8 point in quiet dealings. Among tax-exempt municipal bonds, general obligations and revenue bonds were each off point.

Meanwhile, yields on three-month Treasury bills fell 1 basis point to 5.51%, Salomon Bros. said. A basis point is one hundredth of a percentage point. Six-month bills were up 3 basis points at 5.51% and one-year bills were off 3 basis points at 5.60%.

The federal funds rate, the interest on overnight loans between banks, was quoted at 6.125%, up from 5.938% Wednesday.