Advertisement

Dow Surges 13 in Late Buying, Ends at 2,206.43

Share
From Times Wire Services

The stock market revived its rally Wednesday with a late round of buying that carried the Dow Jones industrial average past 2,200.

The Dow Jones index of 30 industrials climbed 13.22 to 2,206.43, its highest close since it stood at 2,246.74 on Oct. 16, 1987.

Advancing issues outnumbered declines by about 4 to 3 in nationwide trading of New York Stock Exchange-listed stocks.

Advertisement

Big Board volume rose to 148.95 million shares, up from Tuesday’s 140.42 million

In each of the previous four sessions the Dow had crossed 2,200 and then retreated again.

‘Psychological Marking Point’

Traders said futures-related buying was responsible for a portion of the rally, which triggered some short covering by traders who had previously sold stock.

Morry Markovitz, president of Mercury Management Associates, said the day’s performance suggests “that in the New Year, we have the market at a new psychological marking point.”

The index has risen nearly 38 points since New Year’s, but for four sessions had struggled with the 2,200 mark, a technical chart level that had proved a formidable barrier.

Traders have said the 30-share index would have to surpass 2,200 before investors would be attracted to the market in large numbers. “This 2,200 seems to be a magic level,” one trader said.

Brokers said the market drew continuing support 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.

Newton Zinder at Shearson Lehman Hutton said technical analysis did not show any particular significance to the 2,200 level, which the market passed easily in early 1987 and which showed no sign of support in the collapse later that year.

Advertisement

“But in a struggling advance, a round number often represents a psychological barrier,” Zinder observed.

Ford Motor climbed 1 1/2 to 52 5/8 amid conjecture that a dividend increase might be in the offing.

Among other blue chips, International Business Machines gained 1 1/8 to 122 1/4, Alcoa added 1 3/8 to 60, Exxon rose 1/2 to 44 1/2 and General Motors edged up 3/4 to 86 3/8.

Control Data Gains

Raychem tumbled 3 7/8 to 30 7/8 in active trading. The company said it expects to post a significant earnings decline for its fiscal second quarter ended Dec. 31.

Millipore, which estimated a smaller-than-expected sales increase for the fourth quarter, slumped 2 3/4 to 31 1/2.

Caesars World fell 3/4 to 31 1/4 after saying that its board adopted a shareholder rights plan designed to deter what it called coercive or unfair takeover tactics.

Advertisement

Control Data Corp. rose 1 1/4 to 21 7/8 on speculation that the firm might sell one of its units.

Melville Corp. gained 5/8 to 77 after the company lifted its quarterly dividend to 65 cents from 52.5 cents a share.

Sotheby’s Holdings rose 1 1/2 to 23 7/8. Alex. Brown & Sons said it reiterated a “buy” recommendation on the firm because it believes that the stock is undervalued.

Polaroid rose 1 to 37 1/2. Shamrock Holdings, which is making a hostile $42-a-share bid for the company, said the Delaware Supreme Court granted it an expedited appeal on a court decision relating to the bid.

The Wilshire index of 5,000 equities closed at 2,780.393, up 12.271.

The NYSE’s composite index of all its listed common stocks added 0.80 to 158.65.

Standard & Poor’s industrial index rose 1.96 to 326.29; its 500-stock composite index was up 1.63 at 282.01.

The NASDAQ composite index gained 0.72 to 385.31; the American Stock Exchange index closed at 313.86, up 0.91.

Advertisement

In foreign trading, share prices closed slightly lower Wednesday on the London Stock Exchange, hit by a bout of profit taking after strong gains in the last five trading sessions. At the close, the Financial Times 100-share index was down 1.9 at 1,834.1.

Advertisement