Stock Prices Show Strength; Dow Up 17.71 : Program Trades Boost ‘Triple Witching’ Activity
The stock market ended the week with a solid gain Friday in activity swelled by program traders at the quarterly “triple witching.”
The Dow Jones industrial index closed 17.71 points higher at 2,150.71. For the week the Dow average rose 7.22, its fourth-straight weekly gain.
Advancing issues outnumbered declines by more than 2 to 1 in New York Stock Exchange trading, with Big Board volume reaching 196.48 million shares, up from 136.82 million Thursday and the heaviest total since a 196.54-million-share day on Oct. 27.
The joint expiration of certain index futures, index options and individual stock options, known as the triple witching, often roils the market.
Some December futures or options contracts on stock indexes were settled as of the opening Friday, while others were settled at the end of trading.
That prompted extra activity by program traders closing out their positions, and apparently served as a positive force for the stock market.
But, as has been the case in several recent witching hours, it did not produce much in the way of unusual volatility.
Market analysts said stocks were also buoyed by a modest gain in U.S. producer prices in November, which partly relieved concerns that the Federal Reserve will soon raise the discount rate. Takeover issues also attracted some interest, traders said.
Anticipation of Fed credit tightening built earlier this week as European central banks, including the West German Bundesbank, raised key lending rates.
But strength in the dollar and a modest 0.3% rise in November producer prices may have lessened the urgency for the Fed to act quickly, market analysts said.
Overseas, share prices eased on the Tokyo Stock Exchange after a roller-coaster session dominated by rumors that Emperor Hirohito’s health was worsening. The Nikkei 225-share average closed 169.04 points lower at 29,536.71.
Share prices finished higher on the London Stock Exchange on Friday, fluctuating slightly in quiet trading. The Financial Times 100-share index finished up 10.7 points at 1,773.9.
