Stocks Barely Higher Despite World Rallies : Dow Up Just 0.5, Stays in 18-Point Range All Day
Wall Street’s blue chip stocks gained half a point Thursday as nervous investors failed to extend Wednesday’s powerful rally despite strong encouragement from rising overseas equities markets.
The Dow Jones index, up 64.16 points Wednesday, closed only 0.5 points ahead at 2,062.17 after wavering in an 18-point range.
“The small move is symptomatic of a market trying to digest a big gain in an uncertain environment,” said Hildegard Zagorski, an analyst with Prudential-Bache Securities.
As has been the case for much of the time this year, smaller stocks turned in a better showing than the big-name blue chips.
Advancing issues outnumbered declines by about 9 to 5 on the New York Stock Exchange, with 988 up, 541 down and 473 unchanged.
Big Board volume came to 177.84 million shares, against 181.76 million in the previous session. The NYSE’s composite index rose 0.52 to 150.28.
Interest Rate Worries
Over the past three days the Dow Jones index of 30 industrials has gained 81.47 points.
Analysts said new signs of stability in the dollar had touched off rallies in stock markets around the world.
The Tokyo stock market climbed Thursday to new highs, having recovered all the ground it lost in last year’s crash.
But Wall Street brokers said the New York market was held back by the dollar’s mixed performance and interest rate worries.
“Investor sentiment definitely improved on Wednesday, but there are still a lot of doom sayers out there,” said trader Bill Lord with Shearson Lehman Hutton Inc.
The chief worry is whether the stock market has the resolve to continue climbing if U.S. interest rates move higher. Interest-rate fears similarly trimmed U.S. bond prices Thursday.
“At this stage, I am being very cautious,” a stockbroker said. “Without significantly more volume coming in, I don’t think we have a chance of breaking much higher.”
Close to Post-Crash High
Some brokers noted that the Dow’s close proximity to the market’s post-crash high of 2,087.37, set on March 18, may explain some of the resistance being encountered by the blue chips.
And brokers said many traders were reluctant to chase after stocks while talk persists that the Federal Reserve might be leaning toward a tighter credit policy, and that leading banks might soon raise their prime lending rates.
Among Japanese stocks traded in the U.S. markets, Honda Motor gained 3 to 141; Matsushita Electrical 3 3/4 to 223 3/4; Hitachi 1 1/8 to 116 1/2, and Sony 5/8 to 43 3/8.
Those four were among 30 Big Board issues that made new 52-week highs during the session, while 10 hit new lows.
UNC Resources rose 2 5/8 to 10 3/4. Odyssey Partners, a private investor group, said it holds a 5.84% interest in UNC and might seek to buy it out.
Lucky Stores gained 3 3/4 to 52 1/2. The company said it considered a takeover bid by American Stores at either $45 a share or $50 a share inadequate and is considering several alternatives.
Irving Bank jumped 3 3/4 to 67 7/8 on speculation that the company, which is fighting a takeover bid by Bank of New York, might be close to reaching a deal with another party.
