At Midyear Point, Stocks Rally on Lower Interest Rates; Dow Up 19.73
Stock prices ran up a broad gain Thursday with a lift from declining interest rates, capping off an erratic but generally upbeat first half of 1988.
The Dow Jones index of 30 industrials rose 19.73 to 2,141.71. The average finished the first half of the year with a gain of 202.88 points, or 10.46%.
Advancing issues outnumbered declines by nearly 3 to 1 in nationwide trading of New York Stock Exchange-listed stocks, with 1,164 up, 411 down and 406 unchanged.
Volume on the floor of the Big Board came to 227.41 million shares, against 159.59 million in the previous session. Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 251.76 million shares.
A big chunk of Thursday’s activity, as in many recent sessions, came in a handful of high-yielding utility stocks involved in trading strategies based on their impending dividend payments.
“The (stock) market looks in pretty good shape,” said George Pirrone, a senior trader with Dreyfus Corp. “But the volume looks a little artificial because of the dividend rolls.”
“Big institutional investors still remain cautious,” said Marshall Acuff with Smith Barney, Harris Upham & Co. Other traders said the relatively light volume, which may have exaggerated the price movements, was characteristic of pre-holiday activity on the market.
Otherwise, analysts said investors drew some encouragement from a drop in bond-market interest rates.
West German authorities raised some of their key interest rates Thursday, following a similar move in Britain earlier in the week.
But investors in the U.S markets took the news in stride, apparently concluding that the Federal Reserve would not necessarily feel compelled to tighten credit in this country.
Brokers were expecting the pace of activity to slow Friday as the long July 4 holiday weekend approaches.
National Semiconductor fell 1 3/8 to 13. Analysts noted disappointment among investors over the size of the quarterly earnings gain reported by the company after the market closed Wednesday.
Energy issues were broadly lower, with oil prices slumping. Exxon dropped 3/8 to 45 3/8; Amoco was 1 3/4 lower to 72 3/4; Chevron fell 1 3/8 to 45 3/8; Mobil was down 1 3/8 to 43 1/2; Texaco dropped 7/8 to 46 7/8 and Atlantic Richfield slipped 1 1/8 to 80 1/2.
Airline stocks moved up on expectations of lower fuel prices. UAL gained 3 1/8 to 97 7/8; Delta Air Lines was up 2 1/2 to 55; AMR rose 1 7/8 to 50 7/8 and NWA climbed 2 1/2 to 46.
Payless Cashways rose 1 to 26 1/2. Directors approved a $27-a-share buyout bid by a group led by top executives of the company.
Drug Emporium traded at 15 1/2 in the over-the-counter market after an initial public offering of 1.5 million shares at $14.50 apiece.
Avon rose 3/8 to 24 in heavy trading. Analysts said they believe that the beauty products company’s proposal to issue a new kind of preferred share could transform it into a more enticing takeover target.
McGraw-Hill, which surged Wednesday after announcing a reorganization, gave back 3 7/8 to 57 3/4.
The NYSE’s composite index of all its listed common stocks added 1.34 to 154.47.
Large blocks of 10,000 or more shares traded on the NYSE totaled 3,227, compared to 3,125 Wednesday.
The Wilshire index of 5,000 equities closed at 2,729.645, up 23.675 or 0.87% from the preceding day.
Standard & Poor’s industrial index rose 2.53 to 315.73, and S&P;’s 500-stock composite index was up 2.52 at 273.50.
Stock prices in Tokyo closed higher Thursday in heavy trading as recent concern about the direction of the dollar against the yen took a back seat, brokers said.
The Nikkei index gained 162.07 points, or 0.59%, to close at 27,769.40. The index climbed 209.24 points Wednesday. Volume was a mammoth 2.5 billion shares, unchanged from Wednesday.
Share prices also closed higher on the London Stock Exchange in slack trading.
The Financial Times-Stock Exchange 100-share index closed 2.5 points, or 0.1%, higher at 1,857.6.
