Late Rally Lifts Dow 17 Points, Past 2,000 Level
A late rally carried the Dow Jones industrial index back above the 2,000-point level in light trading Monday.
After staying lower much of the day, the index jumped 17.08 points to close at 2,007.63, with most of the gain in the final hour. It was the Dow’s first finish above 2,000 since last Tuesday. Broader market indicators also rose.
Brokers said optimism that the March trade deficit numbers to be released today will show that substantial improvement strengthened the market in the final hours, offsetting pessimism caused by evidence of rising commodity prices, which means higher inflation.
“The market appears to be putting in a pretty good accounting for itself considering the factors against it,” said Joseph Barthel, technical strategist for the Philadelphia investment firm Butcher & Singer Inc.
Awaiting Report
Early trading was marked by a reluctance to buy or sell stocks ahead of today’s trade report for March following a disappointing February report--released a month ago--which triggered a 101-point drop in stocks.
Prices recovered later on technical factors within the market and improvement in the bond market, which benefited from a pullback in commodity futures in the afternoon.
Nevertheless, business on the New York Stock Exchange was extremely sluggish, a reflection of the investor apathy that has plagued the stock market since the crash seven months ago.
The rally Monday afternoon began in high-priced stocks and fanned out quickly to the broader market, giving advances a 3-to-2 margin on light New York Stock Exchange volume of 155.01 million shares, up a bit from Friday’s slow 147.24 million.
However, without the dividend-related trading in one stock, GTE, the volume on Monday would have been nearly one-third less. GTE closed unchanged at 35 3/4.
“There’s a lot of cash on the sidelines,” said Robert O’Toole, manager of over-the-counter trading at Shearson Lehman Hutton in New York. “When it comes in it’s going to be a beautiful market, but I don’t see it coming in.”
High Deficit Damaging
Most economists expect the March trade deficit number released by the Commerce Department to total between $12 billion and $13 billion, down from an unexpectedly high $13.8 billion in February. That number, released April 14, contributed to a 101.46-point selloff in the Dow.
The financial markets are highly sensitive to the trade numbers because they have come to symbolize America’s economic weaknesses. A high deficit translates into a cheaper dollar, inflation and the necessity for higher interest rates.
Besides GTE, the most-active issues included Staley Continental, which fell 3/8 to 36 1/2 on news that it had accepted a sweetened takeover offer of $36.50 a share from Tate & Lyle.
Among prominent blue chips, General Electric rose 1 1/8 to 40 1/2, General Motors gained 1 1/2 to 76 3/4, Dow Chemical climbed 1 to 82 3/4, Minnesota Mining advanced 1 3/4 to 60 and IBM rose 1 to 111 5/8.
Boeing, which received more than half of a 130-plane, $5.04-billion purchase order from International Lease Finance Corp., rose 3/8 to 50 1/8.
Consolidated volume in NYSE-listed issues, including trading at regional exchanges and on the over-the-counter market, totaled 173.84 million shares.
The NYSE composite index rose 0.91 to 146.21.
Standard & Poor’s index of 400 industrials rose 2.33 to 300.56, and S&P;’s 500-stock composite index rose 1.93 to 258.71.
The Wilshire index of 5,000 equities closed at 2,576.494, up 13.122.
At the American Stock Exchange, the market-value index rose 0.02 to 297.96. The NASDAQ composite index for the over-the-counter market closed at 373.35, up 0.87.
Record in Tokyo
In foreign trading, share prices closed at a record high on the Tokyo Stock Exchange.
The 225-share Nikkei index, the market’s main barometer, rose 291.56 points to close at a record 27,759.87.
Prices on the London Stock Exchange staged a late afternoon about-face Monday, dropping as market makers trimmed prices in the absence of new impetus to influence trading.
The Financial Times-Stock Exchange 100-share index closed down 5.2 points, at 1776.2.
Dealers said volume was light as traders awaited direction from today’s U.S. merchandise trade data for March.
