Markets Look to Tokyo; Dow Up 13.34

Stock prices moved higher Wednesday, recapturing a third of their losses of the past two days, as the market took heart from a big rebound in Tokyo and tried to snap out of its doldrums.

The Dow Jones industrial index finished up 13.34 at 2,110.60, settling above the psychologically important 2,100 level. The Dow index lost about 33 points on Monday and Tuesday.

The Dow remained in plus territory and above the psychologically important 2,100 mark throughout the session.

In Tokyo, the 225-share Nikkei index, which lost 764.76 on Monday and Tuesday, recovered 404.95 earlier Wednesday, spurring demand for Japanese stocks listed on U.S. exchanges.

Advancing issues outnumbered losers by about 7 to 5 in nationwide trading of New York Stock Exchange-listed stocks. Trading on the York Stock Exchange was thin, as it has been all week, with volume totaling 151.99 million shares, up from Tuesday’s 144.11 million.

The market shrugged off a big jump in oil prices, which have fluctuated wildly on indications that Iran and Iraq will stop fighting.

Traders also said the market’s modest rebound was supported by a stable dollar, positive technical factors and a strong recovery in the Japanese equities market.

While bargain hunters were lured to the market after two days of declining stock prices, analysts noted that a lot of cash remains on the sidelines.

“Basically what happened most of the day is program related, and that keeps institutions on the sidelines,” said Philip Puccio, a senior vice president at Dillon, Read & Co.

In addition to computer-triggered buy programs, a handful of issues that are the subject of takeover bids and those rumored to be takeover targets accounted for a substantial amount of trading volume. Trading strategies designed to capture dividends also drove up volume, analysts said.

Among actively traded issues, Polaroid jumped 6 to 40. Shamrock Holdings offered to acquire the company for $40 a share.

McGraw-Hill was up 3 3/4 at 64 5/8. The company, which has been mentioned as a potential takeover target, had no comment.

Maytag was up 2 1/2 at 24 5/8. Rumors circulated in the market that the company may be the target of a leveraged buyout. Travelers Corp., the Big Board’s most active issue, rose 1/8 to 36.

In London, the Financial Times 100-share index rose 22.4 points to 1,867.2, its best level for the day.