Stocks Continue to Gain; Dow Up 13.39
The stock market rang up its third consecutive gain Friday, amid heavy futures-related buying and news of a shrinking U.S. trade deficit.
The Dow Jones index of 30 industrials rose 13.39 to 2,324.82, stretching its gain for the week to 38.75.
Advancing issues outnumbered declines by about 9 to 5 in nationwide trading of New York Stock Exchange-listed stocks.
Big Board volume slowed to 159.52 million shares from 177.45 million Thursday.
The Commerce Department reported early Friday that the nation’s trade deficit narrowed to $11.89 billion in December from a revised $12.22 billion in November.
The latest figure jibed with Wall Street estimates in the neighborhood of $12 billion, although both exports and imports were a bit stronger than expected.
“The data contained no bad surprises, and these days no bad surprises is good news,” said analyst Charles Jensen of MKI Securities.
“Basically, the trade figures were nothing to get shook up about, so stocks rose,” analyst Alfred Goldman of A. G. Edwards & Sons said.
Nudging Up Interest Rates
Stocks also drew strength from President Bush’s announcement that he had scheduled an economic summit Tuesday with congressional leaders to discuss solving the federal budget crisis.
“He said what some people wanted to hear--that the best way to get (interest) rates down was to work together with Congress to lower the budget deficit,” Goldman said.
The federal budget deficit has been cited for nudging up interest rates by placing strains on the nation’s capital supply. Higher interest rates, in turn, depress stocks by raising corporate borrowing costs and competing with equities in offering return to investors.
Bonds firmed after the trade report, with the benchmark 30-year Treasury bond rising 4/32 to 98-7/32, yielding 9.05%.
A second straight day of heavy trading spurred by takeover rumors drove the price of Santa Fe Southern Pacific up an additional 50 cents a share to a 52-week high of 23 1/8. Officials at Santa Fe and the supposed suitor, Pennzoil, said they don’t comment on rumors.
However, spokesmen for the two firms noted that both have been the subject of repeated rumors for months. Santa Fe recently completed a big restructuring to ward off takeover attempts, and Pennzoil is nursing a $3-billion kitty from its settlement with Texaco.
Gainers among the blue chips included Eastman Kodak, up 1 at 48 5/8; DuPont, up 7/8 at 98 3/4; McDonald’s, up 1 3/8 at 51 1/2; Procter & Gamble, up 7/8 at 92, and General Electric, up 7/8 at 46 7/8.
Navistar led the active list and dropped 1/4 to 5 7/8. On Thursday, the company reported lower earnings for its fiscal quarter ended Jan. 31.
Bank of New York rose 1 7/8 to 43 7/8, hitting a 52-week high. The company said Thursday that it expects annual earnings growth of 15% to 20% through 1991, somewhat more than its historical targets.
Pfizer fell 7/8 to 55 3/4. The drop was attributed to reports that Rep. John Dingell (D-Mich.) was inquiring into the company’s actions regarding heart valves formerly produced by a Pfizer subsidiary.
Wellman Inc. gained 1 3/8 to 43 3/4 on word that earnings reached 73 cents a share in the fourth quarter, up from 49 cents a share in the year-ago period.
The Wilshire index of 5,000 equities closed up 16.286 at 2,924.847.
The NYSE’s composite index of all its listed common stocks added 0.94 to 166.45.
Standard & Poor’s industrial index rose 2.21 to 342.66; its 500-stock composite index was up 1.95 at 296.76.
The NASDAQ composite index gained 1.49 to 407.19; the American Stock Exchange index closed at 325.95, up 0.80.
In Tokyo, share prices ended a roller coaster day at a record closing high Friday as dealing by securities houses, an abundance of available funds and bullish forecasts for certain sectors triggered buying, brokers said. The Nikkei index rose 89.81 to a record of 32,173.39.
London stock prices closed higher after an afternoon rally sparked by strong early Wall Street gains helped the British market recoup earlier losses. The Financial Times 100-share index was up 9.1 at 2,042.9.
