Rally Continues; Dow Up 5 to Post-Crash High
The stock market gained ground for the fourth straight session Monday, getting a little more mileage out of its early 1989 rally despite resistance from sellers.
The Dow Jones industrial index, which was 10 points higher at one point during the day, ended with a 5.17-point advance, at 2,199.46, a post-crash closing high. But once again the index failed to close above 2,200, repeating Friday’s late action. Over the past four sessions the average has climbed 54.82.
“There’s a great deal of uncertainty. People are just skittish--we keep approaching it (2,200) and backing off. But in order to keep momentum, we’ll have to stay above 2,200,” said Andrew McVeigh, director of research at Rodman & Renshaw Inc.
Advancing issues outnumbered declines by more than 4 to 3 in nationwide trading of New York Stock Exchange-listed stocks.
Volume on the floor of the Big Board came to 163.18 million shares, up from 161.33 million in the previous session.
Traders said a steady dollar helped the stock market. But the Dow’s movements seemed to track those of the dollar, which fell from early highs after West Germany’s central bank president said the bank’s policy called for a strong mark.
The market has also benefited in recent sessions from buying by money managers at investing institutions seeking to put some of their large cash reserves to work at the start of a new year.
In addition, brokers noted, the advance in stock prices of late has come without any help from interest rates. Yields on interest-bearing investments, especially in the short-term money market, remain a strong competitive threat to stocks.
Lockheed Stock Advances
Tom Callahan, Yamaichi International senior vice president, said a record close in the Japanese market on the first trading day after Emperor Hirohito’s death may have given U.S. stock prices an early boost. “I was surprised by the action in Tokyo--there was talk we might get a selloff,” he said.
But keeping a cap on the day’s advance was a large selling program that traders said was undertaken by Goldman, Sachs & Co. involving at least $100 million. Goldman Sachs declined comment.
Lockheed Corp. closed at 44 1/2, up 2 3/8, on renewed rumors that Dallas investor Harold C. Simmons intended to boost his holdings in the aerospace company. Several analysts late Monday discounted the speculation. However, the activity comes on the heels of a Dec. 23rd filing by Simmon’s industrial firm, Valhi, indicating an interest in increasing its stake in Lockheed common stock to more than $15 million. In a Dec. 7 notice to the Securities and Exchange Commission, Valhi had said it owned 375,000 shares, or less than 1%, of Lockheed’s 59.5 million share of common stock outstanding.
Pacific Resources jumped 4 3/4 to 18 1/2. Broken Hill Proprietary Co. of Australia reached an agreement to acquire the company for $19 a share.
Polaroid fell 1 7/8 to 36 3/8 after a court ruled in favor of the company’s employee stock ownership plan, dealing a setback to Shamrock Holdings’s hostile takeover bid for Polaroid.
Holly Farms, which plans to settle a takeover battle by auctioning itself to the highest bidder, rose 1 3/4 to 61 3/4.
In foreign trading, the London Stock Exchange’s Financial Times 100-share index closed up 20.2, or 1.1%, at 1,831.5.
