Program Buying Pushes Dow Ahead 24
The stock market rallied Monday, as program buying propelled the Dow Jones industrial index 24.11 points higher. Analysts said the market was rebounding from the jolt of an unexpectedly strong employment report late last week.
Trading remained relatively quiet, however.
The Dow Jones index of 30 industrials rose to a three-week high of 2,306.25.
Advancing issues outnumbered declines by about 3 to 2 in nationwide trading of New York Stock Exchange-listed stocks.
Volume on the floor of the Big Board came to 140.40 million shares, against 146.83 million in the previous session.
“The unsubstantial volume today suggests that many investors have adopted a wait-and-see attitude,” said Smith Barney, Harris Upham & Co. portfolio strategist A. Marshall Acuff.
The market started the session on a firm footing, helped by its resilience Friday in the face of a strong employment report that suggested a far stronger economy than many had suspected.
“There was some buying this morning on relief the market did not cave in last Friday on the employment news,” said market analyst Alfred Goldman of A. G. Edwards & Sons. Friday’s news that unemployment dropped to a 15-year low in February left the Dow index down 9.25 points, but the final level was above early lows.
The early rise Monday sparked futures-related program buying, which sustained the market for most of the session, Goldman said.
“There’s no question that programs have been out there influencing share prices,” said trader John Groveman of Landenburg, Thalmann.
“I was really surprised. An opening surge of buying (came on) an influx of foreign orders and a stable to strong dollar. When the buying hit, (futures index) program buying kicked in,” said First Albany analyst Hugh Johnson.
But a good portion of the advance was confined to blue chip issues while the overall market languished as investors awaited clues to the direction of the economy from government figures due out later this week.
Gainers among the blue chips included Philip Morris, up 3 1/4 at 118 3/4; American Telephone & Telegraph, up 1 1/8 at 31 5/8; General Electric, up 5/8 at 45 5/8; Exxon, up 3/8 at 44 7/8, and International Business Machines, up 5/8 at 118 7/8.
Shaklee jumped 9 1/4 to 47 3/8. The company agreed to be acquired by Yamanouchi Pharmaceutical Co. for $28 a share after the payment of a $20 dividend to Shaklee holders scheduled for next week.
Shaklee shares trading on when-issued basis without the dividend rose 8 7/8 to 27 1/2.
DWG Corp., the most active issue on the American Stock Exchange, gained 3 1/8 to 10 7/8, while Fishbach Corp., a NYSE stock, fell 1 5/8 to 15 1/8. A group led by investor Andrew Heine made a $22-a-share takeover offer for DWG and dropped a previous $25-a-share bid for Fishbach.
Duriron fell 1 to 22 1/4 in the over-the-counter market. The company projected higher profits in 1989 but said it doesn’t expect growth to match its 143% rise last year.
Tokyo Stocks Lower
The Wilshire index of 5,000 equities closed at 2,919.184, up 18.785 points from the previous day.
The NYSE’s composite index of all its listed common stocks added 1.15 to 166.00.
Standard & Poor’s industrial index rose 3.04 to 341.21, and S&P;'s 500-stock composite index was up 2.44 at 295.32.
The NASDAQ composite index for the over-the-counter market gained 0.67 to 406.57. At the Amex, the market-value index closed at 330.54, up 1.62.
In Tokyo, share prices closed lower because of a resurgence of worries about world inflation and the possibility that local interest rates may head higher. The Nikkei 225-share average fell 148.82 points to 31,552.96.
Share prices on the London Stock Exchange jumped sharply, closing at a new post-crash peak in a burst of enthusiasm before today’s fiscal 1990 budget speech by Chancellor of the Exchequer Nigel Lawson. At the close, the Financial Times 100-share index was up 17.8 points at 2,103.0.