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Dow Rises 17.50, Pushed by Strengthening Dollar

From Associated Press

The stock market rose today, helped by a surging dollar and strength in airline stocks.

The Dow Jones average of 30 industrials rose 17.50 to 2,275.36.

Advancing issues outnumbered declining ones by about 7 to 5 on the New York Stock Exchange, with 820 up, 577 down and 529 unchanged.

Big Board volume totaled 146.42 million shares, against 112.96 million in the previous session.

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The NYSE’s composite index rose 0.56 to 163.88.

European central banks and the Federal Reserve joined in selling dollars, but the intervention failed to prevent the U.S. currency from strengthening.

The dollar’s strength helped buoy bond prices. That encouraged buying of stock index futures, which spilled over through program trading into buying of stocks, said Bill Kent, director of investment research at Robert Thomas Securities Inc.

Short-term interest rates, which provide an attractive alternative to stocks, were little changed.

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The rise in airline stocks was triggered by NWA, parent of Northwest Airlines, that an investment group has acquired 4.9% of NWA and is interested in taking it over.

Bond prices edged higher today, helped by strength in the dollar, lower oil prices and speculation that the economy may be slowing.

The Treasury’s benchmark 30-year bond was up 5/16 point, or about $3 per $1,000 face amount, at midday while its yield, which moves inversely to its price, fell to 9.19% from 9.22% late Monday.

A strong dollar helps prices of dollar-denominated securities by making them more attractive to foreign investors. Falling oil prices reduce inflationary pressures.

Platt said he also expects that government reports to be released on Wednesday will show declines in the Index of Leading Indicators and sales of new one-family homes in February.

The federal funds rate, the interest on overnight loans between banks, traded at 9 7/8%, unchanged from late Monday.


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