FINANCIAL MARKETS : Stocks : Takeover Deals Boost Market; Dow Rises 8.07
Stocks rose again Wednesday in a session marked by takeover deals and mild optimism about the outlook for interest rates.
The Dow Jones index of 30 industrials rose 8.07 to 2,319.65, adding to its 9.71-point gain on Tuesday.
Advancing issues outnumbered declining ones by about 4 to 3 in nationwide trading of New York Stock Exchange-listed stocks, with 818 up, 618 down and 542 unchanged.
Traders were looking ahead to Friday’s flood of economic reports, including widely watched ones on wholesale prices, merchandise trade, industrial production and factory use.
Any indication of a slowdown would ease fears of inflation and thus take pressure off the Federal Reserve to raise interest rates as a way of cooling off the economy.
‘Healthy Fashion’
High interest rates have siphoned money from stocks into the credit market.
“It’s awfully hard to compete with 10% CDs and 9.5% Treasuries,” said Richard Wholey, a broker-analyst at Wayne Hummer & Co. in Chicago.
The bond market was basically flat Wednesday as traders awaited the economic reports, but stocks edged higher, continuing a gradual and uneven upward trend.
So far this year the Dow index has risen just under 7%.
“This is building in a very gradual and, I think, a healthy fashion. There has been no explosion of euphoria. Good, solid base-building is what appears to be going on,” said Peter Barry, research director at Fahnestock & Co. in New York.
The volume of trading on the New York Stock Exchange was the second highest in what has been a quiet month on Wall Street.
Volume on the floor of the Big Board came to 165.20 million shares, up from 146.83 million in the previous session. That was just below the volume of 165.88 million last Wednesday.
Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 195.46 million shares.
On the deal-making front, SmithKline Beckman announced an agreement to merge with Britain’s Beecham Group. SmithKline’s stock was the most actively traded NYSE issue, falling 2 to 62 3/4 on volume of more than 4.6 million shares.
Hewlett-Packard said it agreed to buy Apollo Computer, a workstation maker, for $13.125 a share or $476 million. Apollo jumped more than 50% in price in heavy over-the-counter trading of 10 million shares, rising 4 5/8 to 12 3/4. Hewlett-Packard fell 3/4 to 53 1/2 on the Big Board.
Among other actively traded stocks, Exxon rose 1/4 to 42, American Telephone & Telegraph was unchanged at 31 1/4, Storage Technology was unchanged at 1 7/8 and Greyhound rose 1/8 to 33 3/4.
The Wilshire index of 5,000 equities closed at 2,957.920, up 5.453.
The NYSE’s composite index of all its listed common stocks rose 0.24 to 167.82.
Standard & Poor’s industrial index rose 0.71 to 344.95, and S&P;’s 500-stock composite index rose 0.50 to 298.99.
The NASDAQ composite index for the over-the-counter market rose 2.14 to 415.68. At the American Stock Exchange, the market-value index closed at 334.23, up 1.09.
In Tokyo, stocks ended mixed as political uncertainty spoiled an early rally attempt that brought the market into record territory.
Share prices started at a record high, fell into the minus side in the afternoon and then rebounded near the close, brokers said. Activity was moderate.
The key 225-share Nikkei index finished up 6.87 points at 33,256.45, after ending 250.56 points higher Tuesday.
Shares prices in London ended mixed after an early surge that followed details of the proposed Beecham-SmithKline merger. The Financial Times-Stock Exchange index of 100 blue chips ended 1.7 points higher at 2,033.
