Dow Recovers Record 102; 603 Million Shares Traded : 2nd Highest Volume Ever; Blue Chips Lead the Pack
Blue chip stocks rallied today, pushing the battered Dow Jones industrial more than 100 points higher in a shaky recovery from Monday’s historic 508-point collapse, but the increase erased only one-fifth of Monday’s mammoth loss and the rest of the market remained under pressure in near-record trading.
The key Wall Street average advanced 102.27 points to 1,841.01. It was the market’s first one-day advance of more than 100 points.
Trading was extremely heavy again. Volume was 603.8 million, a shade below Monday’s record-shattering 604.33 million shares.
The previous record point rise in the Dow industrials was 75.23 on Sept. 22. In a day of indecision, the index had gained as much as 200 points in early trading and later was briefly 26 points below Monday’s close.
The rally was narrowly based. Initial tallies showed declining issues leading gaining ones on the Big Board by more than 2-to-1 and secondary averages with wide losses.
The blue-chip rise was helped by many of the nation’s best-known companies announcing plans to buy back their own shares. A bond market rally also buoyed values, as interest rates, which are inverse to bond prices, fell steeply.
Gainers among the blue chips included International Business Machines, Exxon, USX and American Telephone & Telegraph.
USX was one of numerous companies announcing stock buyback plans today in reaction to the market’s recent slide.
Trying to calm the markets, the New York Stock Exchange just before trading began asked securities houses not to use computerized program trading, which moves huge blocks of stock and contributes to the volatility of the market.
At midday, exchanges in New York, Chicago and Kansas City that trade futures and options contracts on stock-market indexes stopped trading because of technical difficulties in getting reports of prices on the underlying stocks. Some trading was resumed shortly after.
Bond prices surged. Traders said one reason was that investors were putting money in bonds out of fears of the possibility--however remote--that the devastation in stock markets would cause another 1930s-style depression by wiping out people’s investments and causing a crisis in confidence.
Analysts said there were encouraging signs that some of investors’ biggest worries were easing.
Interest rates fell sharply in the credit markets today. Yields on short-term Treasury bills tumbled nearly a full percentage point.
That was attributed partly to a “flight to safety” by investors moving their money into the securest possible place. Yet by lowering some key interest rates it also served to relieve a source of pressure on all the securities markets.
