Takeover Stocks Dominate Market : Dow Climbs 1.49 After Trading in Narrow Range All Day
The stock market closed a day of heightened takeover speculation and higher oil prices Wednesday with a small gain in moderate activity.
“Today was mostly a takeover day,” said Hildegarde Zagorski, market analyst at Prudential Bache Securities Inc. “It seemed every stock on the board had a story attached to it.”
The Dow Jones average of 30 industrials, which traded in a tight range all day, closed 1.49 points higher to 2,067.64.
Wider measurements of stocks also rose, and the American Stock Exchange market value index reached its highest level since the October market crash, up 1.61 to 300.41.
Gaining stocks outnumbered declines by a 3-to-2 margin in composite New York Stock Exchange trading, with volume totaling 167.37 million shares, relatively busy compared with the 142 million shares traded Tuesday.
Despite a government report showing that inflation remains relatively tame, bonds fell Wednesday and interest rates rose, partly because of rebounding oil prices and other evidence of economic strength. The net effect was to keep many investors out of stocks.
Whatever money there was went largely into stocks targeted in rumored and factual acquisitions.
Textron jumped 5 to 29 in heavy trading attributed to speculation that the company might receive an unsolicited offer. Other speculative stocks included Gillette, up 3 1/2 to 42 1/2, and Lucky Stores, up 2 to 48 3/4.
IBM Among Losers
Resorts International fell 3 7/8 to 28 after the company rejected a sweetened takeover offer from entertainer Merv Griffin, who has been battling for control of the casino company with developer Donald J. Trump.
Computer stocks fell, partly reflecting a belief that the industry as a whole will not do as well as earlier predicted. Lotus Development fell 3 1/2 to 25 in heavy volume after the company announced delays in the introduction of new software and analysts downgraded their earnings projections.
Other losers included IBM, down 1 1/2 to 111 5/8; Digital, down 1 to 111 3/8; Texas Instruments, down 1 1/8 to 50 3/8, and Compaq, down 2 1/8 to 51 1/2.
Among takeover-linked stocks, Calmat rose 13 1/2 to 45 3/4 after it received a $40 a share takeover proposal from Brierley Investments.
Texaco rose 1 3/4 to 47 after a federal bankruptcy judge approved the oil giant’s reorganization plan. There also was speculation that investor Carl C. Icahn might make a bid for the company.
Merck jumped 4 1/2 to 165 on a reported buy recommendation for the drug company from Wall Street brokerage Eberstadt Fleming.
In foreign trading, stock prices closed lower in London after dull trading Wednesday amid widespread concern about the pound’s strength, particularly against the West German mark.
On the London Stock Exchange, the Financial Times 100-share index closed at 1,832.2, down, 3.2.
In Tokyo, the Nikkei 225-share index gained 52.48 points to close at 25,895.23 after falling 120 points on Tuesday, snapping a four-day winning streak.
