Speculative Issues in Spotlight : Blue Chips Revive; Dow Inches Up 4.45
Blue chips broke free of their recent doldrums Wednesday and ended higher after three successive losing sessions.
But analysts said a large part of the gains was fueled by interest in speculative issues that began Tuesday with news of Grand Metropolitan PLC’s $5.2-billion bid for Pillsbury Co.
Analysts noted, however, that the market breadth improved and volume, which had been dwindling, picked up. Lower oil prices earlier in the day helped perk up interest in both stocks and bonds, they added.
The Dow Jones industrial average rose 4.45 to 2,106.51.
Advancing issues outnumbered declines by about 3 to 2 in nationwide trading of New York Stock Exchange-listed stocks, with 864 up, 576 down and 506 unchanged.
Volume on the floor of the Big Board came to 175.13 million shares, up from 157.76 million in the previous session.
Traders have been leery of making big commitments for several days, awaiting Friday’s report from the Labor Department on employment in September.
Many analysts believe that the figures will show strong job growth, which would presumably revive concerns at the Federal Reserve and elsewhere about inflation.
Given that uncertainty, many traders focused their attention on takeover news and speculation.
Kroger rose 3 1/8 to 58 3/8 in active trading. The investment firm of Kohlberg Kravis Roberts & Co. enhanced its bid for the company.
Pillsbury, target of a $60-a-share takeover bid by Grand Metropolitan PLC, led the active list and gained 1 1/8 to 58 1/8.
Irving Bank Corp. rose 3 3/4 to 73 1/2, and Bank of New York dropped 3/4 to 34 1/8. After a long battle, Irving agreed to be acquired by Bank of New York.
Rumors and conjecture over possible takeover candidates sparked activity in such other stocks as Pennwalt, which rose 5 to 94 1/2; Kimberly-Clark, which gained 3 3/4 to 62 3/8, and Rorer, which was up 2 3/4 at 40 1/2.
On the downside, Goodyear Tire & Rubber tumbled 3 5/8 to 53 5/8. The company estimated sharply lower third-quarter earnings from continuing operations.
Another prominent loser was Digital Equipment, a stock with a wide following among investing institutions. It fell 3 3/4 to 88 1/2, trading at new 52-week lows.
American depositary receipts of Japanese companies were also broadly lower. Matsushita Electrical lost 5 to 177 1/2; Honda Motor fell 5 to 151 1/2; TDK lost 3 to 61 3/4, and Kyocera slipped 2 to 73 1/2.
DCNY dropped 1 3/4 to 23 1/8. The company, whose main business is dealing in government securities, said it had a net loss of $2.39 million in the third quarter.
The Wilshire index of 5,000 equities closed at 2,704.816, up 10.789 from Tuesday’s close.
The NYSE’s composite index of all its listed common stocks added 0.69 to 153.62.
Standard & Poor’s industrial index rose 1.48 to 311.90, and S&P;'s 500-stock composite index was up 1.24 at 271.86.
The NASDAQ composite index edged up 0.32 to 384.52; the American Stock Exchange index closed at 299.97, up 0.35.
In foreign trading, share prices fell moderately on the Tokyo Stock Exchange. The 225-share Nikkei index lost 95.53 to close at 27,501.02.
In London, the Financial Times 100-share index rose 19.0 to 1,826.3.