Dow Jumps 41.06 as Concerns Over Inflation Subside
The stock market ran up its sharpest gain in nearly six months Friday, inspired by an apparent easing of inflationary pressures.
The Dow Jones index of 30 industrials jumped 41.06 to 2,337.06 for its best single-day showing since it rose 43.92 points last Oct. 20.
The increase allowed the index to end the week with a net gain of 32.26 points.
Advancing issues outnumbered declines by more than 5 to 2 in nationwide trading of New York Stock Exchange-listed stocks, with 1,074 up, 404 down and 474 unchanged.
Volume on the Big Board floor was 169.78 million shares, up from 141.59 million in the previous session. Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 201.10 million shares.
The Labor Department reported that the producer price index of finished goods rose just 0.4% in March, compared to 1% increases in each of the two preceding months.
“The worst fears that some market observers had expressed regarding the possibility of a big increase in the producer price index were soundly refuted,” said Marshall B. Front, economist at the Chicago investment and mutual fund management firm of Stein Roe & Farnham.
Separately, International Business Machines reported first-quarter earnings of $1.61 a share, up from $1.57 in the year-ago period.
Wall Streeters generally responded positively to that showing in light of IBM’s warning a few weeks ago that its results this year were not likely to live up to some of the most optimistic estimates in the financial world. IBM shares gained 1 5/8 to 110 7/8.
On a busy day for government economic data, the Commerce Department reported that the nation’s trade deficit widened to $10.5 billion in February, and the Federal Reserve said industrial production was unchanged in March from the month before. Both numbers were pretty much in line with advance estimates.
General Electric, which reported better-than-expected earnings for the first quarter Thursday, rose 1 3/4 to 47 in heavy trading.
Other gainers among the blue chips included Merck, up 1 1/2 at 67 1/4; McDonald’s, up 1 3/8 at 53 3/4; Philip Morris, up 2 1/8 at 119 5/8; Coca-Cola, up 1 3/8 at 52, and Du Pont, up 2 1/2 at 106 1/2.
In Tokyo, share prices wandered to a higher close Friday, while the dollar firmed in a last-minute rally after an otherwise listless day ahead of the release of key U.S. economic statistics.
On the Tokyo Stock Exchange, the 225-share Nikkei index rose 86.50 points to close at 33,150.44 in the thinnest trading in three weeks.
In London, stocks closed firm after a string of economic data from both sides of the Atlantic that were close to market expectations, dealers said. The Financial Times 100-share index closed 24.9 points higher at 2,053.6, with 593 million shares changing hands.
