Stocks Edge Higher in Very Quiet Session
Stock prices closed higher Monday, bolstered by a rising dollar and mild bargain hunting in the slowest trading of the year. The Dow Jones index of 30 industrials, which fell 49.10 points last week, rebounded 14.82 points to 2,257.86.
Advancing issues outnumbered declines by about 7 to 6 in nationwide trading of New York Stock Exchange-listed stocks.
Volume on the floor of the Big Board came to 112.96 million shares, down from 153.75 million last Thursday and the lightest total since a 110.63 million share day on Dec. 28.
A smattering of takeover activity and a steady dollar lent background support to traders looking for an excuse to hunt bargains after two weeks of setbacks in stocks.
But trading was anemic, with many players reluctant to return to the market following the three-day Easter weekend. The market was closed for the Good Friday holiday.
“It’s one of the lightest days I’ve seen in quite awhile,” said Charles Jensen of MKI Securities. He said the advance was “not very convincing” and raised questions about its staying power.
“You can’t be impressed when volume is so light,” said Larry Wachtel of Prudential-Bache Securities.
Brokers attributed the tepid market to the absence of trading in Europe, where exchanges are still closed for the Easter holiday, and to market anxiety ahead of today’s meeting of the Federal Reserve’s key policy-making committee.
“Europe was closed and the Japanese are winding up their fiscal year,” said market analyst Trude Latimer of Josephthal & Co, explaining the slack volume.
Jerry Hinkle of Sanford C. Bernstein & Co. said investors are trying to assess several issues, including the seriousness of inflation, further rises in interest rates, and whether the economy could be pushed into a recession.
“We at Sanford C. Bernstein do not think there will be anything close to a recession but the marketplace is neurotic,” Hinkle said.
The market has drawn some support lately from suggestions by analysts that the Federal Reserve may bide its time for a while before deciding whether to tighten credit further.
Michael Boskin, chairman of President Bush’s Council of Economic Advisers, said in a weekend interview that he believes interest rates are close to peaking out. He predicted lower rates later in the year.
But worries have also increased of late that subsiding interest rates could be accompanied by a slowing of economic activity significant enough to qualify as a recession.
In some scripts now being written on the Street, that would mean that corporate profits might also be topping out about now.
American Medical International led the active list and jumped 3 5/8 to 21 1/2. An investor group led by Dr. M. Lee Pearce made a $24-a-share buyout offer for the company, which also announced that its board is considering a financial restructuring. In a related development, Standard & Poor’s and Moody’s Investors Service said they placed AMI’s debt under review for possible downgrading.
Other hospital-management stocks moved up in sympathy to the AMI buyout offer. Humana gained 1 to 29 5/8, and National Medical Enterprises added 1/4 to 27 3/4.
Polaroid fell 4 1/2 to 36. The company succeeded in fending off the takeover advances of Shamrock Holdings Inc.
International Minerals & Chemicals rose 2 1/8 to 41 1/4. The company said Curtiss-Wright Corp. had received clearance to acquire more than $15 million of International’s stock.
Sears Roebuck gained 1/8 to 42 1/2 in active trading. The company announced the sale of its Coldwell Banker commercial real estate business to the unit’s employees and an investor group.
Exxon was unchanged at 44 1/2, recovering from some early selling on news of the huge oil spill that occurred when an Exxon Shipping Co. tanker ran aground Friday near Valdez, Alaska.
The Wilshire index of 5,000 equities closed at 2,872.208, up 11.260, or 0.39, from the trading day.
The NYSE’s composite index of all its listed common stocks gained 0.68 to 163.32.
Standard & Poor’s industrial index rose 1.94 to 334.73, and S&P;’s 500-stock composite index was up 1.59 at 290.57.
The NASDAQ composite index for the over-the-counter market dropped 0.38 to 400.56. At the American Stock Exchange, the market value index closed at 325.50, up 0.63.
On the Tokyo Stock Exchange, prices eased in late trading Monday to close near their lows for the day after the dollar’s rise to over 132 yen encouraged some profit taking, brokers said. The Nikkei 225-share index lost 56.12 points, or 0.18%, to end at 31,512.40, near the low of 31,505.20.
The London Stock Exchange was closed the Easter holiday.
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