Blue Mondays End: Dow Index Rises 20 Points
Wall Street stabilized today after two blue Mondays in a row, ignoring a weaker dollar, as the Dow Jones industrial average rose about 20 points to break the 2,000-point barrier.
The Dow average had fallen 26 points in the opening minutes of trading but quickly recovered. It ended the day up 20.56 to 2,014.09, a gain of 1%. Five stocks gained for every three that fell on the New York Stock Exchange.
The market closed 1 1/2 hours earlier than usual by arrangement to allow traders to cope with the heavy volume of trading. However, only about 176 million shares traded hands today, far lighter than the last two weeks.
Two Mondays ago, the Dow plummeted 508 points in the worst decline in history, and it lost 156.83 points last Monday. Today’s was the first rise in the Dow on a Monday since late September.
Dollar at Postwar Lows
The dollar fell again today in New York to postwar lows, raising the possibility of instability that could frighten away foreign investors, push up inflation in the United States and hurt economic growth overseas.
But traders seemed unalarmed by the dollar’s decline because they believed it would not run out of control, said Larry Ryan, foreign exchange manager for European American Bank in New York.
“It’s a quiet market. This is exactly what they want: a nice, slow, orderly decline in the dollar,” he said.
The New York Stock Exchange opened as usual today in spite of a strike threat by clerks, whose contract expired over the weekend, said Richard Torrenzano, an NYSE spokesman. Talks broke off shortly before 3 a.m. and were to resume later in the day, federal mediator Pat Hart said.
Hong Kong Prices Lower
The dollar’s drop affected early domestic trading in the bond market, where prices declined slightly and interest rates rose. Bonds have been particularly sensitive to weakness in the dollar because it can discourage foreign investors from buying U.S. debt securities.
Prices on the Hong Kong Stock Exchange closed generally lower in quiet trading, with the prime indicator of blue chips, the Hang Seng index, down 36.90 points to 2,203.23.
The London Stock Exchange’s Financial Times index of 100 stocks fell 1.5%.
A key measure of the Tokyo market, the Nikkei average, closed up 26.69 points at 23,358.60 in light trading. During a half-day trading session Saturday, the exchange surged by 2.5%.
