Trade Report Boosts Stocks; Dow Rises 21.72 : Index at Post-Crash High for 2nd Time in March

Stocks surged higher Thursday in a rally driven by a better-than-expected trade deficit report and takeover speculation, giving the Dow Jones industrial index its second post-crash peak this month.

The closely watched index of 30 blue chip stocks rose 21.72 points to 2,086.04 in a late buying spree, much of it from large institutional investors who had been reluctant to get into the market.

‘Window Dressing’

It was the index’s best showing since the Oct. 19 collapse in stock prices, topping a post-crash high of 2,081.07 set March 8. Broader market indicators also improved.

A Commerce Department report showing the January trade deficit totaled $12.4 billion was welcomed by Wall Street. Although the figure was up slightly from the December deficit of $12.2 billion, many strategists had expected a $13-billion shortfall in January.

That news helped the dollar’s value, eased interest rates in the bond market, provided an optimistic tone for stocks and substantiated other evidence of a growing export economy and eased dependence on imports.

“I think what happened is we got the trade numbers out of the way. They were good numbers. Some institutions said, ‘let’s jump in,’ ” said Hildegarde Zagorski, a market analyst at Prudential-Bache Securities. “I would say that throwing everything together, it looked pretty good.”

Volume on the New York Stock Exchange totaled 211.92 million shares, significantly more than the 153.59 million traded in the previous session. It was the busiest since March 8.

But the volume was partly inflated by the inaugural issue of Templeton Global Income Fund, a bond fund in which more than 20 million shares were traded, unchanged at the offering price of $10.

Some strategists attributed much of the rally to short-term efforts by institutional money managers to put unused cash to work before the first quarter expires March 31, so they can show clients better looking portfolios.

‘You’re getting some window dressing by the institutions,” said Lawrence Helfand, manager of retail sales at Rodman & Renshaw Inc. in Chicago. “What happens when the window dressing is over is another story.”

Others expressed mild apprehension about “triple-witching hour” on Friday, a quarterly phenomenon named for the expiration of contracts on stock index futures, options and futures on stocks.

Triple-witching hour has injected wildness into the market previously, although steps taken to curb that volatility have tamed the event recently.

Gaining issues outnumbered losers by more than a 9-to-5 margin in composite New York Stock Exchange trading, with 995 up, 554 down and 442 unchanged.

Takeover speculation helped boost some of the most notable stocks, including Phillips Petroleum at 17 7/8, up 1 5/8; Pillsbury at 45 3/8, up 3 3/8; U.S. Shoe at 24 7/8, up 2 5/8; and Grumman at 23 1/8, up 2.

Among the best performing blue chips, Alcoa rose 1 1/2 to 46 7/8; Du Pont rose 1 to 89; Bethlehem Steel rose 1 to 23, and Mobil rose 1 1/8 to 45.

Digital Equipment tumbled 5 3/8 to 112 after Merrill Lynch lowered its earning estimates for the computer company.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 237.90 million shares.

The NYSE index of all listed issues rose 1.40 to 152.68.

Standard & Poor’s index of 400 industrials rose 3.39 to 314.78, and S&P;’s 500-stock composite index rose 2.57 to 271.22.

The Wilshire 5,000 Equity Index, which measures the value of all U.S. stocks, rose by $22.84 billion.

At the American Stock Exchange, the market-value index rose 1.48 to 298.99. The NASDAQ composite index for the over-the-counter market closed at 380.70, up 2.16.

The Tokyo stock market surged further above pre-crash levels Thursday, frustrating efforts by authorities to dampen investor enthusiasm.

Keen bidding for financial and electrical shares pushed up the Nikkei index, the market’s main indicator, to close at 25,872.29, a new high since last October’s crash.

This was also above the 25,746.56-point mark hit Oct. 19, 1987, just before Wall Street’s plunge sent stock markets worldwide tumbling.

The Tokyo Stock Exchange boosted margin requirements to 60% from 50% in a move aimed at discouraging speculative buying.

In London, stocks--which were sharply lower early in the day--recovered to finish slightly higher. The Financial Times index of 100 leading shares rose 2.4 points to close at 1,828.1--up 15 points from the lowest point in the session.

The rise came after the British central bank lowered one of its lending rates by half a point.