Stocks Rebound After Early Selling : Program Trades Push Blue Chips Higher; Dow Up 10.67
Stock prices overcame an early round of selling to post some spotty gains in a quiet session Friday.
The Dow Jones average of 30 industrials, down about 4 points in the early going, closed with a 10.67 gain at 2,090.68. That left the average with a net gain for the week of 0.53.
Advancing issues slightly outnumbered declines in nationwide trading of New York Stock Exchange-listed stocks, with 744 up, 681 down and 545 unchanged.
Volume on the floor of the Big Board came to 145.10 million shares, down from 150.67 million in the previous session.
The stock market through much of the day ignored a decline in bonds that was blamed on a stronger-than-expected 6% rise in August durable goods--the first surprisingly strong economic indicator after others showed the economy in a much hoped for slowdown that relieved inflation worries.
“It looks like people aren’t going to let one number get in their way,” said a trader, referring to the durable goods report.
A spurt of computer program buying helped blue chips move higher in late afternoon. Analysts said some institutional buying before the end of the third quarter next week also helped stock prices advance.
“There has been some bottom-fishing in blue chips by institutions partially due to the the end-of-quarter window dressing,” said analyst Alfred Goldman with A. G. Edwards in St. Louis.
An easing in oil prices was another encouraging factor, said trader Philip Puccio at Dillon Read & Co. In late trading, the price of crude oil for November delivery fell 47 cents to $14.18 a barrel.
The 30-year U.S. bond, down more than a half point initially, managed a comeback to close with a loss of just 5/32 at 100-23/32, as its yield edged up to 9.05% from 9.04% on Thursday.
Analysts said any further progress in stock prices next week will hinge on the direction of bond prices.
Baxter Most Active
“If bond prices accommodate and are flat or lift a little, I’m looking for the stock market to give another try at moving above the overhead resistance at 2,100 and 2,120,” Goldman said. The Dow has failed to hold 2,100 since Wednesday’s close at 2,100.64.
Baxter International led the active list, down 1 5/8 at 18 1/8 on turnover of nearly 8 million shares. Late Thursday the company said that it expected its 1988 earnings to fall short of analysts’ estimates.
Control Data, which also scaled back its earnings expectations for the year, fell 1 5/8 to 20 5/8.
Bolt Beranek-Newman, which estimated lower profits for its current fiscal quarter, compared to the like period a year ago, dropped 2 1/8 to 14 1/2, ranking as the day’s biggest percentage loser among NYSE issues.
Gainers among the blue chips included American Telephone & Telegraph, up at 26 1/2 in activity intensified by dividend-related trading; Exxon, up 3/8 at 44 7/8; General Electric, up at 43 1/8, and International Business Machines, up 7/8 at 112 7/8.
In foreign trading, prices closed marginally higher in quiet trading on London’s Stock Exchange.
The Financial Times 100-stock index closed 3.7 points higher at 1,792.4.
The Tokyo Stock Exchange was closed Friday for the Japanese national holiday marking the autumn equinox.