Dow Climbs 15.89 in Broad Rally
Wall Street stocks hit another post-crash high Thursday, rising for the second consecutive session on broad-based buying by both institutions and professional traders.
The Dow Jones index of 30 industrials climbed 15.89 to 2,222.32--less than 25 points shy of its close of 2,246.74 on Oct. 16, 1987, just before it took a 508-point drop on Black Monday.
Advancing issues outnumbered declines by more than 3 to 2 in nationwide trading on the New York Stock Exchange, with Big Board volume swelling to 183 million shares from Wednesday’s 148.95 million.
Analysts said traders were encouraged by the market’s drive Wednesday past the 2,200 level in the Dow after a weeklong struggle.
In addition, they cited a developing “bandwagon” effect as investors who had been bearish on the outlook for months felt increasing pressure to join in the rally.
The market’s steady advance since last fall has come without any support from interest rates, which have been rising. The Federal Reserve has continued to tighten credit, and many Wall Streeters still believe that the Fed might soon raise its discount rate.
Concern over economic figures due out today prompted traders to take profits late in the day, halting the market’s advance. The Dow had been as high as 2,239 during the session.
The December U.S. producer price index, an important inflation gauge, is expected to rise 0.4% against a 0.3% gain in November. The December U.S. retail sales figure is expected to rise 1.3% in December, compared to a 1.1% rise in November.
“People know that the numbers are coming out, but they don’t know what it’s going to be, so they’d rather go home flat than with long or short positions,” one trader said.
Among actively traded blue chips, Merck rose 3/4 to 59 7/8, International Business Machines gained 7/8 to 123 1/8, General Electric added 5/8 to 45, American Telephone & Telegraph rose 1/4 to 29 1/8 and Ford Motor added 1/4 to 52 7/8.
Ford lived up to traders’ hopes, raising its quarterly dividend to 75 cents from 60 cents a share.
Elsewhere, Kollmorgen gained 2 3/8 to 24. The company asked its holders to take no action on Vernitron Corp.'s offer of $23 a share until Kollmorgen directors study the bid and make a recommendation.
Dexter Corp., the subject of rumors about a possible takeover or restructuring, picked up 2 1/4 to 25 3/4. The company said it had no news pending to account for the activity.
Novo Industri rose 3 to 42 1/2. The company plans to merge with Nordisk Gentofte, another Danish concern.
Greater New York Savings Bank jumped 2 1/4 to 11 7/8 in the over-the-counter market. The company said Emigrant Savings Bank proposed to acquire it for $16 a share.
Brisk London Trading
The Wilshire index of 5,000 equities rose 10.201 to close at 2,790.594.
The NYSE’s composite index of all its listed common stocks added 0.61 to 159.26.
Standard & Poor’s industrial index rose 1.70 to 327.99; its 500-stock composite index was up 1.16 at 283.17.
The NASDAQ composite index gained 1.70 to 387.01; the American Stock Exchange index closed at 315.00, up 1.14.
Japanese stocks closed little changed Thursday after late buying, in part futures related, helped bring prices up from earlier lows. The 225-share Nikkei closed unchanged from Wednesday’s record close of 31,143.45.
However, share prices on the London Stock Exchange finished broadly higher in brisk trading, with the market’s advances led by heavy activity in electrical stocks as well as by an early rally on Wall Street. The Financial Times 100-share index closed 16.8 points higher at 1,850.9.