Dow Rises 15.08 as Fear of Recession Wanes Among Stock Traders
The stock market kept its year-end rally going with a spotty advance in quiet trading Monday.
The Dow Jones index of 30 industrials rose 15.08 to 1,990.38, extending its gain since Dec. 4 to 223.74 points. The last time the index closed above 2,000 was Nov. 2, when it stood at 2,014.09.
Advancing issues outnumbered decliners by about 9 to 7 on the New York Stock Exchange, with 947 up, 707 down and 352 unchanged. Big Board volume totaled 161.79 million shares, down from 276.22 million in the previous session.
Analysts said confidence among investors had been gradually recovering as stock prices advanced since early this month, based partly on hopes that the broad economy might escape severe damage following the crash in October.
They also cited some seasonal influences working in the market’s favor. For one thing, money managers at investing institutions are presumed to be eager to bid up stocks to improve the results that they show in year-end reports to clients.
Market Still Vulnerable
For another, many traders are apparently seeking out bargains in stocks depressed by year-end tax selling.
Concern persists, however, that the market remains vulnerable to aftershocks from its historic autumn sell-off.
Wall Street has been busy lately studying the so-called January effect--a historical tendency for stocks, especially smaller and deeply depressed ones, to rally early in a new year after the pressure of tax selling has lifted.
The phenomenon has received so much attention that some analysts fear it won’t work out that way this time around. As Edward Nicoski, an analyst at Piper, Jaffray & Hopwood, said: “The market is a discounting mechanism, and it will always do whatever it needs to do in order to confound and frustrate the majority of investors.”
Pennzoil fell 1 7/8 to 77 1/2 and Texaco was down 1 at 37 1/2. Brokers said some traders who bought the stocks earlier on anticipation of an agreement between the two companies to settle their long legal dispute sold when the news became official.
Blue Chip Shares Rise
Singer dropped 5 1/2 to 43 1/2. The company said talks with various parties, including investor Paul Bilzerian, haven’t produced any takeover proposals that it considers acceptable.
Gainers among the blue chips included International Business Machines, up 1 at 118; American Express, up 1/2 at 24 1/8; DuPont, up 3 3/8 at 86 1/2, and Philip Morris, up 1 1/8 at 91. American Telephone & Telegraph, however, lost 7/8 to 28.
As measured by Wilshire index of more than 5,000 actively traded stocks, the market rose $6.80 billion, or 0.28%, in value.
The NYSE’s composite index of all its listed common stocks added .34 to 139.49.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 189.56 million shares.
Standard & Poor’s index of 400 industrials gained .67 to 288.23, and S&P;’s 500-stock composite index was up .38 at 249.54.
