FINANCIAL MARKETS : Stocks : Dow Rises 8.43 Despite Some Investor Jitters
Stock prices rose slightly Thursday in restrained trading that reflected uncertainties over news from Panama, the progress of a Treasury debt auction and an upcoming report on inflation.
The Dow Jones index of 30 industrials rose 8.43 to 2,382.88.
Advancing issues outnumbered decliners by a margin of about 4 to 3 in nationwide trading of New York Stock Exchange-listed stocks, with 785 issues up, 602 down and 568 unchanged.
After an early selloff, the market moved higher behind strengthening bond prices, which rose on a Commerce Department report of lower-than-expected retail sales figures for April. The government said retail sales rose a modest 0.4% last month.
Analysts said the number pointed to a slower economy, giving the markets impetus to move out of their recent slump by signaling lower interest rates.
But activity remained subdued with investors awaiting the final day of the Treasury’s $28.75-billion three-day round of borrowing. There was uncertainty over how a new glut of Treasury debt would be absorbed.
Many market participants also withdrew in nervous reaction to President Bush’s announcement that he was sending more troops to Panama.
“That kept some traders on the sidelines wondering what steps might be taken there,” said Charles Jensen, technical analyst with MKI Securities Corp. “Otherwise, we might have had a better response.”
The market has spent most of the week waiting for April producer price numbers, which it hopes will provide a clearer indication of inflation in the economy. Observers said last Friday’s jobless report confused investors, because while it showed higher unemployment and a slowing economy, it also showed that wages rose substantially in April, suggesting that inflation is still a problem.
The producer price report is scheduled for release today.
Among actively traded issues on the NYSE, Avon fell 3/8 to 39 1/2, Pan Am lost 3/8 to 4 5/8 and IBM dropped 1/2 to 109 1/8.
Hilton Hotels, meanwhile, surged 6 1/2 to 72 on news that the company would consider takeover offers. Block Enterprises also rose 1 1/8 to 27 3/8, and General Electric gained 1 1/8 to 49.
In Tokyo, the main Nikkei stock index gained 89.14 to close at 34,08.49.
In London, share prices closed mostly lower in an atmosphere of continued unease about possible labor actions.
The Financial Times 100-share index finished 6.4 lower at 2,110.6.
Credit
Bond prices rose after three days of declines, aided by favorable inflation indications and what analysts called strong demand at a government securities auction.
The Treasury’s key 30-year bond rose 15/32 point, or $4.69 per $1,000 face amount, after falling a total of about $15 earlier in the week. Its yield fell to 9.06% from 9.10% late Wednesday.
Yields on the 30-year bonds rose to 9.11%, up from 8.91% at the last comparable auction in February. It was the highest rate since 30-year bonds averaged 9.17% a year ago.
In the secondary market for Treasury bonds, prices of short-term governments rose 7/16 to 11/16 point, intermediate maturities rose 13/32 point and long-term issues were up 11/32 to 15/32 point, according to Telerate Inc., a financial information service.
The movement of a point equals a change of $10 in the price of a $1,000 bond.
In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds closed up 1/8 at 91-31/32. The average yield to maturity dropped to 7.60% from 7.62% late Wednesday.
Yields on three-month Treasury bills fell to 8.72% as the discount fell 7 basis points to 8.43%. Yields on six-month bills fell to 8.91% as the discount fell 9 basis points to 8.42%. Yields on one-year bills fell to 9.03% as the discount fell 12 basis points to 8.37%.
A basis point is one-hundredth of a percentage point. The yield is the annualized return on an investment in a Treasury bill. The discount is the percentage that bills are selling below the face value, which is paid at maturity.
The federal funds rate, the interest on overnight loans between banks, traded at 9.69%, down from 9.75% late Wednesday.
Currency
The dollar gained against most major currencies despite further evidence of a slowdown in U.S. economic growth.
Gold prices rose, partly in response to the tension in Panama.
In London, one British pound cost $1.6655 late Thursday, down from late Wednesday’s $1.6717. Sterling weakened against the dollar in New York, ending the day at $1.6645, compared to $1.6740 on Wednesday.
Other late dollar rates in New York, compared to Wednesday’s late rates included: 1.9160 West German marks, up from 1.9020; 135.37 Japanese yen, up from 134.41; 1.7080 Swiss francs, up from 1.6921; 1.1870 Canadian dollars, up from 1.1843; 6.4755 French francs, up from 6.4220, and 1,395.75 Italian lire, up from 1,385.25.
Late rates for the dollar in Europe, compared to Wednesday’s late rates, included: 1.9135 West German marks, up from 1.9047; 1.7060 Swiss francs, up from 1.6925; 6.4665 French francs, up from 6.4645; 2.1580 Dutch guilders, up from 2.1500; 1,395.75 Italian lire, up from 1,390.125, and 1.1870 Canadian dollars, up from 1.1849.
Republic National Bank of New York quoted a late bid of $379.40 an ounce, up from late Wednesday’s bid of $376.60. Earlier, gold bullion for current delivery rose $3.30 to $381 on the Commodity Exchange in New York.
Gold bullion prices improved slightly in Europe. Gold traded late in London, the major market, at $379, up from $377.25. In Zurich, Switzerland, gold rose to $378.20 from $376.75. Earlier, in Hong Kong, gold closed at $377.25, down from $378.25.
On New York’s Comex, silver bullion for current delivery settled at $5.65 an ounce, up from $5.607 on Wednesday. Silver traded late in London at $5.66, down from $5.68.
Commodities
Crude oil futures prices climbed back above $20 a barrel and petroleum product prices soared in a rally bolstered by President Bush’s decision to send combat troops to Panama.
On other markets, grain and soybean futures fell, precious metals advanced, cattle prices rose and pork futures were mixed.
On the New York Mercantile Exchange, West Texas Intermediate crude settled unchanged to 54 cents higher, with the contract for delivery in June at $20.06 a barrel; heating oil was 0.07 cent to 1.20 cents higher, with June at 48.68 cents a gallon; unleaded gasoline was 0.80 cent to 2.56 cents higher, with June at 67.28 cents a gallon.
Soybean futures ended sharply lower on the Chicago Board of Trade amid forecasts of rain and disappointment over the government’s reluctance to subsidize a sale of U.S. soybean oil to the Soviet Union.
Wheat and corn futures also retreated.
After the markets closed, the Agriculture Department issued a report estimating 1989 U.S. winter wheat production at a decade low of 1.43 billion bushels.
Wheat settled 1 3/4 cents lower to 1 1/2 cents higher, with the contract for delivery in May at $4.28 a bushel; corn was 1 1/2 to 3 1/4 cents lower, with May at $2.76 1/4 a bushel; oats were 1 1/2 cents lower to 1/2 cent higher, with May at $1.84 1/2 a bushel; soybeans were 6 3/4 to 10 1/4 cents lower, with May at $7.51 1/2 a bushel.
Most cattle futures ended slightly higher in light trading after weakening earlier in the session. Pork futures settled mostly lower amid profit taking after two days of steep gains.
Tables begin on Page 6
