Blue Chip, Food Stocks Top Most Others
The stock market capped another skittish session with a slightly firmer finish Wednesday, with gains limited largely to selected areas such as food companies and some blue chips.
The Dow Jones index of 30 industrials rose 2.85 to 2,134.07, after the two previous trading days in which it eked out a net gain of 2.49 points.
Big Board volume came to 203.59 million shares, up from 166.66 million Tuesday. Advancing issues slightly outnumbered declines in nationwide trading of New York Stock Exchange-listed stocks.
Brokers said the market was still beset by concerns that strong economic growth would prompt further moves by the Federal Reserve to restrain inflation.
Food, Drug Stocks Strong
The Labor Department’s monthly report Friday on employment for July is expected to show continuing robust gains in payroll employment, although the unemployment rate may hold steady at 5.3% or even back up to 5.4%.
“There’s been a lot of good interest in blue chips. Food and drug stocks are also acting well,” said Ed Laux, a trader at Kidder Peabody & Co.
Analysts and traders also saw some interest in financial institutions, which may have been encouraged by recent firmness in bond prices.
“But the market is having trouble rounding up enough stocks to look healthy,” said Lewis Smith, technical analyst at Bear Stearns & Co. “The signs are not very positive.”
“The financial markets continue to resist reacting to events,” said Robert Brusca, economist at Nikko Securities International, in a current commentary. “They appear to be hopelessly confused and struck with the summertime blues.”
The relatively few stocks that moved much Wednesday were generally responding to takeover developments and speculation.
McGraw-Hill rose 1 3/8 to 70 7/8 on speculation that its shares were being accumulated by a suitor, traders said. No new names joined the list of possible buyers, however.
Zenith Electronics was down 2 to 22 1/8, even though the company told an analysts meeting that it expects a modest profit for the full year.
Analysts said the fall reflected Wall Street’s disappointment in the vagueness of the firm’s plans for its money-losing consumer electronics operations.
Food stocks, highly successful in the day’s trading, included strong showings by Ralston Purina, up 2 1/8 to 79 1/2; Kellogg, ahead 1 1/8 to 57 7/8; General Mills, up 1 5/8 to 50 3/4, and Quaker Oats, up 3 1/8 to 52 3/4.
Burlington Northern’s shares rose 1 3/8 to 67 7/8, with a lift from an IRS ruling making distribution of an 87% stake in Burlington Northern’s unit--Burlington Resources Inc.--tax-free to shareholders.
Shares of American President Cos. fell 3 3/8 to 31 7/8, after it announced a planned buyback following deflated expectations of a takeover.
Insilco jumped 6 to 27 on word that the company’s management is considering a buyout proposal.
Texaco, trading ex-dividend, rose 3/4 to 47 5/8, while Texaco Canada was unchanged at 30 3/4 on the American Stock Exchange. On Tuesday Texaco said its 78% stake in Texaco Canada was for sale.
Loss on Tokyo Exchange
The Wilshire index of 5,000 equities closed up 8.225 at 2,713.785.
The NYSE’s composite index of all its listed common stocks gained 0.49 to 154.03.
Standard & Poor’s industrial index rose 0.97 to 314.58, and S&P;’s 500-stock composite index was up 0.92 at 272.98.
The NASDAQ composite index for the over-the-counter market added 0.72 to 388.52. At the American Stock Exchange, the market-value index closed at 306.34, down 0.16.
In foreign trading, Tokyo share prices fell Wednesday to give the Tokyo Stock Exchange its first loss in eight trading sessions.
The Nikkei Index fell 17.88 points to 28,348.45.
Share prices closed broadly higher on the London Stock Exchange, as dealers reported the reemergence of some long-awaited institutional buying interest in the leading British stocks.
The Financial Times 100-share index rose 9.6 to close at 1,865.1.
