Economic News Pushes Dow Up 20.17
The stock market climbed Thursday, propelled by new evidence of a slackening in economic growth.
The Dow Jones average of 30 industrials climbed 20.17 to 2,340.71, its highest close since it stood at 2,343.21 on Feb. 8. The day before that the average hit a post-crash high of 2,347.14.
Advancing issues outnumbered declines by about 9 to 5 in nationwide trading of New York Stock Exchange-listed stocks.
Volume on the floor of the Big Board reached 196.04 million shares, up from 167.07 million in the previous session.
“Frankly, the market is acting real well. But it was helped by a couple of huge buy programs,” one trader said.
A portion of the day’s computer-driven buying programs was related to the expiration of several major futures and options contracts, also know as “triple witching,” market analysts said. “The move in share prices was exaggerated by the options,” said Charles Jensen of MKI Securities.
A complication for the immediate market outlook was the “triple witching hour” today, when the last trading occurs in a series of stock and index options and futures.
The Federal Reserve reported that industrial production was unchanged in February from the month before.
Signs of Cooling
A separate government report showed a decline of 0.2 percentage points, to 84.3%, in capacity utilization of the nation’s production facilities.
Analysts said those figures were read by some traders as evidence of an easing in the strains the economy has been exerting on inflation and interest rates.
That provided some hope for signs of improvement in today’s impending report on the producer price index for February. A 1% increase in the index during January unsettled both the stock and bond markets.
Thursday’s economic data followed Wednesday’s U.S. merchandise trade report, which showed the deficit shrinking to $9.49 billion in January, a sharp drop from the prior month’s $10.99 billion. The report boosted stocks and bonds. “The numbers this week helped relieve fears of an overheating economy,” said market analyst Alfred Goldman of A. G. Edwards & Co.
Stocks of money-center banks were strong on word from the Bush Administration that its debt-reduction initiative could reduce Third World debt by about 20% over the next three years.
J. P. Morgan rose 1 1/2 to 37 1/4; Citicorp was up 1 3/8 to 28 1/8; Chase Manhattan added 1/2 to 34 3/8, and Chemical Banking rose 1 1/8 to 32 5/8.
USX gained 3/4 to 32 7/8. In its annual report, the company gave an upbeat assessment of its future.
Pacificorp was actively traded, up 3/4 at 34 3/4. The stock was added to Standard & Poor’s 500-stock composite index, prompting buying by funds set up to parallel the performance of the index.
Indicators Advance
TW Services jumped 2 5/8 to 31 3/4. The company asked its investment bankers to investigate alternatives to a $29-a-share takeover bid by Coniston Partners.
The Wilshire index of 5,000 equities closed at 2,953.138, up 23.655 from Wednesday’s close.
The NYSE’s composite index of all its listed common stocks added 1.43 to 168.10.
Standard & Poor’s industrial index rose 3.04 to 346.01, and S&P;’s 500-stock composite index was up 2.77 at 299.44.
The NASDAQ composite index for the over-the-counter market gained 2.53 to 409.51. At the American Stock Exchange, the market-value index closed at 332.52, up 0.73.
Japanese stocks ended mixed Thursday after investors took profits. The 225-share Nikkei index eased 2.24 points to close at 32,098.24.
In London, stock prices fell in light trading, reflecting what brokers called renewed worries about slower growth and inflationary pressures. At the close, the Financial Times 100-share index was down 8.6 points, or 0.4%, at 2,112.6. The Financial Times 30-share index fell 14.2 points to 1,740.1.
