Dow Advances 28.63 as Blue Chips Sparkle in Generally Dull Market

Blue chip stocks staged a late session rally Thursday that brought the stock market to a higher finish, erasing Wednesday’s sharp losses.

Analysts said a firmer dollar and some futures-related buying helped spur the advance.

The Dow Jones index of 30 industrials rose 28.63 to close at 2,082.33, erasing a 20-point drop in the previous session.

Advancing issues outnumbered declines 5 to 3 in nationwide trading of New York Stock Exchange-listed stocks.

Big Board volume rose to 154.57 million shares, against Wednesday’s 135.89 million.

“It was pretty much a blue chip rally,” said Philip Roth, a technical market analyst with Shearson Lehman Hutton, noting that broader measures did not keep pace with the Dow index.

A sharp fall in the Commodity Research Bureau index was another positive factor, traders said. The CRB, which measures a wide range of commodity prices, is watched as a gauge of inflation. The index fell 3.33 to 2,241.97.

Analysts said a reiteration of Federal Reserve credit policy by Fed Chairman Alan Greenspan on Thursday morning apparently pleased investors.

“The market seemed to come back while he was speaking even though he didn’t seem to say anything new,” said Susan Marker, assistant vice president of trading at Janney Montgomery Scott Inc.

Calmed Some Jitters

Greenspan, repeating a statement he made two weeks ago, said the Fed might be advised to err more on the side of restraint rather than permit easy credit and a return of inflation.

He also said he saw no immediate signs that inflation was shooting up.

The market liked “not what Greenspan said, but what he didn’t say,” observed Trude Latimer, a trader at Josephthal & Co. “He implied policies would remain the same.”

Worries about higher interest rates have kept many investors out of the stock market, since lower bond prices and the correspondingly higher yields would compete with stocks for investors’ money. Greenspan’s remarks appeared to calm some of the jitters for the time being, traders said.

Strategies to capture quarterly dividends also accounted for a fair share of the day’s volume.

Market watchers cautioned, however, that investors are largely uncommitted to equities. “There’s an enormous amount of cash on the sidelines,” said Michael Metz, a vice president and technical analyst at Oppenheimer & Co.

The market was also encouraged by a sharply higher dollar, which also helps keep inflation low and shows a healthy appetite for U.S. stocks and bonds from foreign investors.

Technology Issues Gain

The dollar gained nearly 2 pfennigs against the West German mark to close at 1.8665.

Analysts said strength in a scattering of technology stocks, which have recently been battered by disappointing earnings, as well as rises in selected blue chips, provided leadership to the market.

“In the last several days the broader market was doing better than the Dow,” which had reached the low end of its recent trading range, said Alfred E. Goldman, vice president at A. G. Edwards & Sons Inc. in St. Louis. “That was a precondition for a technical bounce,” he added.

Analysts were not entirely optimistic that Thursday’s upward spike would be sustained.

“We’ll have to wait and see,” Goldman said. “The bears showed what they could do last week and took the market down, now its the bulls’ turn to strut their stuff and see if they can take it up.”

Among actively traded Big Board issues, Interco soared 8 3/8 to 67 3/4. The company received a $64-a-share buyout offer from City Capital Associates.

McGraw-Hill was up 4 at 66 amid rumors that the British firm Pearson PLC might make a bid for the publisher.

York International fell 1 to 57. Snyder General withdrew its $61-a-share bid for the company because of antitrust concerns.

Indicators Climb

Digital Equipment rose 3 5/8 to 105 7/8. The company reported better-than-expected quarterly earnings. IBM, which announced price increases on most products and services, climbed 2 5/8 to 123 3/4. Polaroid was up 7/8 at 43 1/8 and Chrysler, whose lower quarterly earnings were in line with expectations, rose at 22 5/8.

The Wilshire index of 5,000 equities closed at 2,654.532, up 25.299.

The NYSE composite index was up 1.66 at 150.40.

Standard & Poor’s index of 400 industrials advanced 4.15 to 307.30, and S&P;’s 500-stock composite index was up 3.52 at 266.02.

At the American Stock Exchange, the market-value index rose 0.78 to 303.63. The NASDAQ composite index for the over-the-counter market closed at 384.08, up 0.76.

In Tokyo, share prices closed higher Thursday on buying by funds in a quiet session that was hit late in the day by widespread profit taking.

The Nikkei 225-share index rose 57.52 to close at 27,796.09.

A late rally pushed prices into positive territory Thursday on the London Stock Exchange.

The Financial Times 100-share index rose 0.5 to close at 1,841.3.