Dow Revives After 5-Day Losing Streak
The stock market’s blue chip indicator roared past the 2,300 mark Wednesday, snapping a five-day losing streak on strength in the bond market and a stable dollar.
The Dow Jones industrial index, which fell slightly Monday and Tuesday after losing 45.18 points last week, surged 22.68 points to 2,303.93.
The Dow has now closed higher only two days this month, Wednesday and Feb. 7--when the key index climbed 26.07 points to a post-crash closing high of 2,347.14.
Advancing issues outnumbered declines by about 5 to 3 in nationwide trading of New York Stock Exchange, with Big Board volume totaling 154.22 million shares, up from 149.56 million in the previous session.
Interest rates, which have been climbing of late, pulled back a bit in the credit markets Wednesday.
Analysts said that evidently encouraged traders to do some selective buying of stocks, especially in the blue chip sector and in issues involved in takeover rumors and speculation.
In the economic news, the Federal Reserve Board reported a 0.3% increase in industrial production last month.
The figure came in slightly below what most analysts had been expecting, and thus didn’t do much to aggravate the inflation worries that have been dogging both the stock and bond markets.
In the closing stages of the session, the market’s advance carried the Dow index past the 2,300 level, which some chart-watching analysts had suggested might be shaping up as a psychological obstacle.
Tokyo’s Nikkei 225-share index rose strongly to a record close Wednesday, although declines just exceeded advances in the broader market. The Nikkei rose 166.59 points to a record close of 32,149.48.
On the London Stock Exchange, stock prices closed mixed in slow trading as buying interest dried up amid uncertainty about the outlook for interest rates and British corporate earnings. The Financial Times 100-share index closed down 1.6 points at 2,047.5.
COMMODITIES
Energy futures prices broke through an important price barrier and posted significant gains after reports that non-OPEC oil producers have proposed limiting their output of crude oil by 300,000 barrels a day, as well as rumors of contaminated oil stocks in Louisiana.
On other markets, soybeans added modestly to Tuesday’s strong gains; platinum surged despite a continuing gold slump, and cattle and pork futures were off slightly in advance of a government report that traders fear could show too many animals are already at feed lots.
Crude oil futures settled 83 cents higher in the spot month of March, with the contract for delivery reaching $18.25 a barrel. Gains ranging from 29 cents to 66 cents were registered in the back months at the New York Mercantile Exchange.
“The crude (oil) market started off going nowhere, but once it heard an offer was on the table for that kind of a cut, it pushed through a lot of resistance at $17.85 level,” said Peter Beutel of Elders Futures Inc.
A report originating in London said a number of non-OPEC producers ranging from Mexico to the Soviet Union have indicated a willingness to cut their combined production before a meeting with members of the Organization of Petroleum Exporting Countries set for London sometime next month.
“Then the market stalled again at $18,” said Beutel, “and we got a second boost from rumors of contaminated stocks in Louisiana. No one pinned it down,” he added, “but in the absence of being clear, we saw some very good buying.”
