Dow Rises 9.96 on Bargain Hunting : Market Also Buoyed by Central Banks’ Support of Dollar
The stock market extended its recovery Friday, helped by bargain hunting and a further rebound in the recently battered dollar.
The Dow Jones industrial index rose 9.96 to 2,062.41, trimming its loss for the week to 4.62.
Share prices in the broader market, which were mixed Thursday, joined in the advance, with rising issues outnumbering declines by about 3 to 2 in nationwide trading of New York Stock Exchange-listed stocks. Big Board volume dropped to 119.32 million shares from Thursday’s 141.28 million.
Equities traders said bargain-hunting opportunities were created after the market fell Wednesday to the lowest level in more than two months.
“We’ve had some bottom fishing in stocks,” said William Raftery, a technical analyst with Smith Barney, Harris Upham & Co.
Another impetus for buying was a second day of concerted central bank intervention aimed at putting a floor beneath the dollar, brokers said.
The U.S. currency rose to 1.7385 West German marks and 122.60 yen, compared to 1.7225 marks and 122.05 yen at Thursday’s close in New York.
In addition, the “double witching” expirations Friday of the Standard & Poor’s 100-stock index option and futures contracts on major market indexes spurred demand late in the day, brokers said.
Such expirations have caused wide swings in the past, but trading was generally uneventful Friday.
Brokers said investors were mildly encouraged by Treasury Secretary Nicholas F. Brady’s comment that he was not worried about the dollar’s weakness and that he saw no sign that U.S. interest rates would rise.
House Speaker Jim Wright also heartened the market when he said President-elect George Bush was ready to tackle the budget deficit, a remark that boosted the dollar.
Among the takeover issues, Kraft rose 7/8 to 103 on expectations that Philip Morris would receive antitrust clearance to proceed with its merger with Kraft. Philip Morris said it had completed its filing with the government.
MCA Shares Fall
RJR Nabisco rose 1 to 84 on speculation that the two bidders for the conglomerate, a management-led group and Kohlberg Kravis Roberts & Co., would submit higher bids at the deadline.
Kentucky Utilities rose 1/8 to 18 in brisk trading. Its stock went ex-dividend Friday.
R. P. Scherer rose 1 1/8 to 26 5/8 after saying its adviser, Goldman Sachs, is surveying prospective buyers for the company and expects to distribute documents to qualified parties at the end of the month.
Continental Illinois Corp. was flat at 5 3/8. Analysts said the Federal Deposit Insurance Corp. was likely to get little more than $5 a share for the 57.5 million Continental Illinois shares that it plans to sell to the public by year-end. The FDIC received its stake in the Chicago bank as part of a 1984 rescue.
MCA Inc. shares fell $1 to 42 7/8. Developer Donald J. Trump was rumored to have sold a large block of MCA shares. Trump was not available to comment.
General Electric, which raised its quarterly dividend to 41 cents from 35 cents a share, climbed 1/2 to 43 7/8.
Hewlett-Packard rose 1 3/4 to 48 1/8. On Thursday, the company reported that its earnings for the fourth fiscal quarter ended Oct. 31 increased to $1.03 a share from 85 cents a year ago.
Other gainers among the blue chips included Exxon, up 5/8 at 42 1/8; American Telephone & Telegraph, up at 27 5/8; International Business Machines, up at 115 3/4, and Coca-Cola, up 1/2 at 42.
Veeco Instruments added 5/8 to 25 3/8 on top of a 1 7/8-point gain Thursday, when the company agreed to be acquired by Unitech PLC for $26.50 a share.
The Wilshire index of 5,000 equities closed up 13.765 at 2,628.235.
The NYSE’s composite index of all its listed common stocks added 0.94 to 150.18.
Standard & Poor’s industrial index rose 2.43 to 306.36; its 500-stock composite index was up 1.87 at 266.47.
The NASDAQ composite index edged up 0.15 to 367.58; the American Stock Exchange value index closed at 286.67, up 1.30.
In foreign trading, bullish sentiment pushed Tokyo share prices to their sixth straight record close Friday. The Nikkei 225-share index rose 103.39 to a record close of 29,180.20. It was up 80.69 at the previous record close of 29,076.81 on Thursday. The winning streak has given the index an extra 1,013.78 points, and brokers said this is the first time since the October, 1987, crash that the index has been at record closing highs for six straight sessions.
Share prices were narrowly mixed on the London Stock Exchange, as the market found little fresh news from which to draw direction. The Financial Times 100-share index fell 0.2 to close at 1,823.4.
