Blue Chips Gain in Sluggish Session : Dow Edges Up 3.20 as Market Holds to Cautious Pattern
Blue chip stocks closed slightly higher Wednesday after two days of losses, as stocks continued their recent pattern of moving in a tight range on extremely light trading.
The Dow Jones industrial index rose 3.20 points to 2,085.53, with advancing issues outnumbering declines by about 7 to 6 in nationwide trading of New York Stock Exchange-listed stocks.
Volume on the floor of the Big Board came to 113.72 million shares, barely surpassing Tuesday’s total of 113.01 million.
Market analysts said investors are reluctant to act and are waiting for further economic data to decide whether the economy is cooling. The next major indicator is the September employment report due Oct. 7, which will give the first official report of the month’s economic activity.
The Labor Department’s report on the employment situation for this month, in particular, is widely expected to show strong job growth and thus put a damper on recent hopes that the economy was cooling off.
Whatever the economic data says, however, market watchers believe that stocks will have trouble attracting much enthusiastic buying for some time to come.
The approaching anniversary of Black Monday on Oct. 19 is reviving unhappy memories of the crash.
In addition, brokers say, there is a great deal of uncertainty among investors about the prospective outcome of the presidential election campaign.
Discouraging Situation
“This has been basically a carbon copy of the last two days,” said George Pirrone, senior trader at Dreyfus Corp. “No one seems to be in a rush to do anything.”
“It’s discouraging, because there’s no volume and there’s not enough to do,” said William Lord, a trader with Shearson Lehman Hutton.
But some analysts said a period of consolidation in stock prices was not surprising after four weeks of net gains, and the market may soon make another attempt at breaking through the psychologically important 2,100 level. The last successful close above that level was two weeks ago.
Union Carbide Corp., one of the most active NYSE issues, rose 1/2 to 23 3/4. The company sold its 60% holding in Union Carbide Australia & New Zealand.
Shares of Genentech Inc. fell 1 5/8 to 17. The drug maker announced Tuesday that physicians have been reluctant to use its new heart attack drug, TPA, confirming market suspicions that the company’s sales were slow.
Time Inc. shares rose 2 3/8 to 108 5/8. A published report said the company had held merger talks with Warner Communications Inc. Time has previously denied rumors that it was considering a leveraged buyout.
Macmillan Inc. shares were unchanged at 88 5/8. British publisher Robert Maxwell said he is determined to win Macmillan despite the company’s agreement to a $2.5-billion buyout offer from Kohlberg Kravis Roberts. A Delaware court set an Oct. 10 hearing on Maxwell Communications’ lawsuit to block the takeover agreement.
Blue Chip Gainers
Shares of Ausimont NV rose 5/8 to 34 1/8, above Montedison SPA’s offer of $33.50 a share for the 27.3% of Ausimont that it does not already own. Analysts believe that a higher offer may emerge. The Ausimont board said it would consider the offer.
Gainers among the blue chips also included Exxon, up at 44 1/2; International Business Machines, up 5/8 at 113 7/8, and General Electric, up 3/8 at 43.
In Tokyo, optimism stoked by the start of a new financial year for the big brokers helped Japanese shares to rally in brisk trading on Wednesday, brokers said.
The Nikkei 225-share average rose 252.45 points to 27,752.01.
Prices also closed modestly higher on the London Stock Exchange after an uneventful session.
The Financial Times 100-share index ended up 4.5 points at 1,815.5.
