FINANCIAL MARKETS : Stocks Turn Higher in Wake of Bond Rally; Dow Index Gains 1.79
The stock market rose Friday for the third consecutive day as investors took heart from an afternoon rally in the bond market, brokers said.
The Dow Jones index of 30 industrials rose 1.79 to 2,640.99, finishing the week with a net gain of 70.82 points.
Volume on the New York Stock Exchange came to 189.07 million shares, against 193.20 million in the previous session.
Analysts said many traders had been impressed by the market’s forceful rise Thursday, which seemed to signal an end to the setback it suffered in late August and most of September.
The market had been down much of the day following an early selloff in the bond market, which lifted bond yields to their highest levels in nearly two years. Rising yields tend to draw money away from stocks and into bonds. Brokers said stocks turned higher after Treasury bond prices staged a surprise rally.
Strengthening Economy
Meanwhile, investors also were faced with signs of continuing strength in the economy. The Labor Department reported that the civilian unemployment rate dropped to 5.9% in September from 6% the month before.
The data showed an increase of 132,000 in non-farm payroll employment, compared to a revised gain of 152,000 in August.
Energy stocks were mostly higher as oil prices rose, spurred by talk in Iran of increasing tensions between that nation and the United States. Amoco gained 1 3/8 to 84, Atlantic Richfield rose 1 1/2 to 96, Occidental Petroleum advanced 1 1/8 to 35, Chevron edged up 1/2 to 55 5/8 and Texaco climbed 5/8 to 41 1/2.
In the oil service and drilling sector, Schlumberger climbed 1 to 48 1/8, Halliburton rose 1 to 40 and Baker Hughes gained 3/4 to 25 3/4.
Among actively traded blue chips, International Business Machines rose 5/8 to 155, General Electric gained 1/8 to 62 3/8, American Express dropped to 37 and American Telephone & Telegraph was down 5/8 at 34 1/8.
Some technology issues gained more ground after a strong showing Thursday. Digital Equipment added 1 1/2 to 192, National Semiconductor picked up 7/8 to 21 1/8 and Hewlett-Packard advanced 1/8 to 72 5/8.
Asks for Clearance
Alexander’s Inc. jumped 4 1/2 to 49 1/2. Donald Trump, New York real estate developer and financier, asked that government regulators give him clearance him to buy as many shares of the stock as he might want.
Earlier in the week, Trump ended talks with Interstate Properties of New Jersey about a possible joint acquisition of Alexander’s, an operator of department stores in the New York area.
“This has been the most narrowly based advance of this magnitude since the bull market began in 1982,” said Ricky Harrington of Interstate Securities, referring to the Dow’s rise of nearly 150 points in the past nine days.
Harrington said strength has been concentrated in the blue chips, chemicals, papers, metals and other cyclical stocks. “Strength elsewhere was extremely fragmented,” he said.
The cyclicals generally rise late in a bull market, he noted. “I think this is a high-risk market. No one knows when it’s going to top out,” he said.
Gainers Edge Losers
The bull market is now in its sixth year, making it one of the longest-lasting booms in Wall Street’s history.
Advancing issues outnumbered declines by about 8 to 7 in the overall tally on the NYSE. The exchange’s composite index of all its listed common stocks rose 0.46 to 183.43.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 220.48 million shares.
Standard & Poor’s index of 400 industrials rose 1.08 to 383.28, and S&P;’s 500-stock composite index was up 0.74 at 328.07. The Wilshire index of 5,000 equities closed at 3,226.641, up 9.854.
The NASDAQ composite index for the over-the-counter market gained 3.16 to 451.61. At the American Stock Exchange, the market-value index closed at 359.37, up 1.21.
In foreign trading, share prices on the Tokyo Stock Exchange closed higher Friday, sparked by Thursday’s rally on Wall Street and helped by a generally robust mood, brokers said.
The Nikkei 225-share market index gained 140.71 to close at 25,862.45.
