Dow Up 4.83 as Investor Jitters Cool Off Early Rally
Wall Street stocks closed with modest gains today as investor jitters ahead of Friday’s unemployment report took some of the steam out of an early rally fueled by strength in bonds and the dollar.
The Dow Jones industrial average ended up 4.83 points at 2,295.54.
Advances led declines by almost four to three on the New York Stock Exchange. Big Board volume totaled 167.62 million shares, against 172.50 million in the previous session.
Blue chips were up by over 20 points at midday, piercing the key 2,300 mark amid strong bonds and a surging dollar. But the rally soon cooled as investors took to the sidelines ahead of Friday’s report on February U.S. unemployment, which will shed light on the economy’s current strength and its prospects for future inflation.
The benchmark 30-year Treasury bond was up 10/32 at 98-4/32 when the NYSE closed, dipping its yield to 9.06% from 9.09%. The dollar rose to 1.8630 West German marks from 1.8535 and to 129.22 yen from 128.75 after chief White House economist Michael Boskin said the Bush Administration was willing to discuss raising taxes--indicating a possible move toward reducing the federal budget deficit.
Bond prices were down in early trading today as a listless market continued awaiting the government’s release of February unemployment figures on Friday.
“You don’t really have any drivers,” said Elliott Platt, research director at DL&J; Securities Corp. “Everyone’s really just looking for the next piece of data.”
Platt said there was little change in the dollar in overseas trading today and no other factors that normally affect credit markets.
In the secondary market for Treasury bonds, prices of short-term governments were off 1/32 to 3/32 point, intermediate maturities fell 3/32 point and long-term issues were down as much as 7/32 point, according to Telerate Inc., the financial information service.
The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.
The Shearson Lehman Hutton daily Treasury bond index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, fell 0.89 to 1,122.80.
The federal funds rate, the interest on overnight loans between banks, was quoted at 9 9/16%, up from 8 3/4% late Tuesday. Analysts attributed the sharp rise to short-term factors such as snowy weather in New York and the Eastern Airlines strike that affected the flow of funds in the banking system.
