Advertisement

Dow Advances 10.67 as Inflation Jitters Ease

From Times Wire Services

The stock market closed moderately higher Tuesday after Friday’s big rally, as investors remained optimistic that inflationary pressures are easing. But the trading level remained slow and signaled cautious behavior by large influential investors.

The Dow Jones industrial index closed up 10.67 at 2,065.26, adding to a 52.28-point rise Friday. The market was closed Monday for Labor Day.

New York Stock Exchange volume totaled only 122.25 million shares, considerably less than the 159.84 million traded on Friday, when the Labor Department’s report that unemployment rose in August incited some enthusiasm in the markets because it eased fear of inflation.

However traders said investors held back, with at least one key report due this week--the producer price index for release Friday, which is a more direct measure of the inflation worries that were troubling the market in August.

Advertisement

“The run-up on Friday was exaggerated,” said Philip Puccio, manager of institutional trading at Dillon Read & Co., noting that volume was a moderate 159.8 million shares.

“But from a consolidation point of view, today’s action gives people a little more confidence the market can sustain the rally,” he added.

Much Skepticism

“Traders were looking for a pullback, and when they didn’t get it, they decided to put some money to work,” said Jon Groveman, Ladenburg Thalmann & Co.'s head of equity trading.

Advertisement

“It was nice having some follow-through, but today’s rally left a lot to be desired,” Groveman said. “There’s a lot of skepticism out there. People want to wait and see before they jump in.”

“Despite the fact volume hasn’t accelerated dramatically, the underlining bias is distinctly positive,” said Eugene Peroni, technical analyst at Janney Montgomery Scott Inc. in Philadelphia. “Most stocks are behaving well.”

Advancing issues outnumbered declines by about 4 to 3 in nationwide trading of NYSE-listed stocks.

Among the most prominent issues, IBM slumped 1 1/8 to 112 7/8 on reports that a group of smaller computer makers planned to introduce a rival to the Personal System/2. IBM’s decline helped drag down some other big-name technology stocks, notably Digital, which fell 2 to 92 1/2, and Compaq, down 1 1/2 to 52 5/8.

Advertisement

A plunge in oil prices depressed petroleum stocks although it helped transportation issues. Chevron fell 5/8 to 44 1/2; Schlumberger fell 1/2 to 32 1/2, and Occidental fell 3/8 to 25 7/8. AMR rose 1 5/8 to 44 7/8; Delta rose 7/8 to 47 3/4, and UAL rose 1 3/8 to 91.

Foreign Markets Mixed

Waste Management gained 1 to 38 7/8. The Wall Street Journal’s “Heard on the Street” column Tuesday said the company could benefit from tightened state regulations on trash disposal.

The Wilshire index of 5,000 equities closed at 2,642.590, up 8.578.

Advertisement

The NYSE composite index of all listed issues rose 0.54 to 150.20

Standard & Poor’s industrial index rose 1.27 to 304.62, and S&P;'s 500-stock composite index rose 1.11 to 265.59.

The American Stock Exchange index rose 0.97 to 296.56; the NASDAQ composite index closed at 377.33, up 0.82.

In Tokyo, share prices closed slightly lower Tuesday but above the day’s lows after a fluctuating, featureless session that saw few players and thin turnover.

Advertisement

The Nikkei 225-share index lost 21.07 to close at 27,320.51. It lost 146.67 Monday.

However, share prices closed slightly higher in London but sharply off their peak levels as the market slid in late trading in the wake of declining New York prices.

At the end of trading, the Financial Times 100-share index was up 3.5 at 1,768.0.


Advertisement
Advertisement