Dow Up 3; Caution Dominates Market
The stock market closed mostly higher in thin trading Wednesday, but prices were knocked from early highs by skepticism about the economy and some secondary averages ended lower.
The Dow Jones industrial index closed 3.15 higher at 2,047.91, for its fifth straight rise. Advancing issues slightly outnumbered declines in New York Stock Exchange-listed trading, with 755 up, 711 down and 509 unchanged.
New York Stock Exchange volume shrank to 133.81 million shares from 152.30 million the day before. The NYSE’s composite index edged up 0.01 to 148.94.
“The market still looks like investors are treading on hot coals,” said analyst Michael Metz of Oppenheimer & Co. Several big rallies in recent days have fizzled and the market appears tentative each time it advances.
Most of the gain in the Dow index was laid to Du Pont, the chemical giant, which reported higher profit and boosted its dividend. One of the 30 industrials, Du Pont closed up 1 7/8 at 96 3/8 and accounted for two-thirds of the Dow’s upturn.
Analysts said the latest government statistics seemed to support hopes that the economy was neither slipping into a recession nor growing at a dangerously fast pace.
The Commerce Department said Tuesday that the gross national product expanded at a 2.3% annual rate, after adjustment for inflation, in the first quarter of the year.
Stronger Earnings Help
Metz said the waffling nature of the market reflected mixed feelings about stock prices and the economy.
“The longer-term investors are on the sidelines awaiting signals to move either the market or the economy,” he said.
Despite the sheepishness, the Dow index held the 60 points it has tacked on in the past week, with trading underpinned by a host of companies such as Du Pont that have reported stronger earnings for the first quarter, although stocks remain below the level of early April.
“The market since early March has failed to establish conviction and leadership, causing rallies to fail,” said Dean Witter analyst Chris Callies.
Union Carbide, another component of the Dow index, rose 7/8 to 23 3/4 and led the NYSE active list on turnover of 2.4 million shares. The company said its results for the first half of 1988 will be better than had been expected.
Ford Motor, which increased its projections for car and truck production for the third quarter, added 3/4 to 47 1/2.
By contrast, Chrysler, which posted nearly flat first-quarter profits before a one-time charge, lost 1/8 to 23 5/8.
Western Savings & Loan jumped 1 to 7 5/8. The company denied rumors that it might be a takeover candidate.
Indicators Mixed
Cadbury Schweppes climbed 6 3/4 to 67 1/8 in the over-the-counter market. General Cinema said it planned to seek approval to increase its 17.7% stake in the company.
The Wilshire index of 5,000 equities closed at 2,624.272, up 2.032.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 162.78 million shares.
Standard & Poor’s industrial index rose 0.03 to 307.54, and S&P;’s 500-stock composite index was off 0.13 at 263.80.
The NASDAQ composite index for the over-the-counter market gained 0.83 to 378.67. At the American Stock Exchange, the market-value index closed at 301.16, down 0.29.
In Tokyo, share prices closed lower Wednesday due to profit taking after four straight advances, with a lack of fresh positive factors keeping trade subdued, brokers said.
The Nikkei 225-share index lost 54.80 points to close at 27,191.97.
Stock prices ended higher London, although waning enthusiasm late in the day led the market to trim many of its early gains.
The Financial Times 100-share index closed up 5.9 points at 1,806.7. The index had risen as much as 13.1 points after midday.
Takeover speculation, again ruled the day. Traders said that without it, London stocks would have been flat at best.
“The rest of the market’s just marking time,” one market maker said.
