FINANCIAL MARKETS : Dow Rises 5.88 in Market’s 3rd Straight Gain
The stock market eked out its third straight gain in another quiet session Thursday as traders awaited the latest monthly report on employment.
The Dow Jones index of 30 industrials rose 5.88 to 2,462.44, bringing its gain since the start of the week to 22.38 points.
Advancing issues outnumbered declines by about 9 to 5 in nationwide trading of New York Stock Exchange-listed stocks.
Volume on the floor of the Big Board came to 140.45 million shares, against 127.70 million in the previous session.
The Labor Department is due to issue statistics today on the employment situation for June.
Analysts expect the figures to show growth at the rate of as much as 250,000 in non-farm payroll employment, more than double the 101,000 preliminary increase reported for May.
But they also maintain that the June figure will be inflated by a quirk in the timing of surveys on which the data is based.
Thus, some argue, the latest evidence may not deter the Federal Reserve from relaxing its credit policy to cushion the impact of a slowdown in business activity.
Brokers added that a pickup in employment might be warmly received anyway in the financial world right now, by serving to calm the recession worries that began to flare up late last month.
Armstrong World Industries rose 1 3/8 to 49 1/4 in active trading on top of a 4 3/8-point jump Wednesday, when the company said the Belzberg family of Vancouver, Canada, had acquired 9.85% of its stock and was considering a possible bid for the rest.
Takeover rumors and speculation lifted several other issues, among them Syntex, up 3/4 at 50; UAL, up 5 1/2 at 152 1/2, and Whitman, up 1 at 34 5/8.
General Public Utilities rose 5/8 to 40 7/8, surpassing highs dating back to the 1960s. The company, whose stock traded as low as 3 3/8 in the aftermath of the accident at its Three Mile Island nuclear power plant 10 years ago, raised its quarterly dividend from 45 cents to 55 cents a share.
In over-the-counter trading, Apple Computer climbed 3/4 to 41 1/4 and Adobe Systems dropped 2 3/8 to 24 1/2. Apple said it planned to sell its 16.4% stake in Adobe and was developing products to compete with some Adobe technologies.
As measured by Wilshire Associates’ index of more than 5,000 actively traded stocks, the market increased $10.80 billion, or 0.34%, in value.
The NYSE’s composite index of all its listed common stocks gained 0.57 to 178.92.
Standard & Poor’s industrial index rose 1.02 to 367.19, and S&P;’s 500-stock composite index was up 0.91 at 321.55.
The NASDAQ composite index for the over-the-counter market added 2.63 to 439.57. At the American Stock Exchange, the market value index closed at 361.11, up 1.99.
Tokyo stocks closed higher in light trading, helped by a sharp rise in the Japanese yen in overseas markets and a drop in short-term domestic interest rates. The Nikkei 225-share index gained 113.77 points to close at 33,423.48.
In London, stock prices sagged slightly, pulled down by the negative influence of Wall Street in a thinly traded market. The Financial Times 100-share index ended the day at 2,161.2, down 1.7 points.
Credit
Bond prices rebounded amid further signs that the Federal Reserve might be easing monetary policy and pushing interest rates lower.
The Treasury’s bellwether 30-year bond rose about 7/16 point, or more than $4.30 per $1,000 face amount. Its yield, which moves inversely to price, fell to 8.09% from 8.12% late Wednesday.
Analysts said indications that the Federal Reserve might have eased credit helped drive bond prices higher.
“The banking system has a large system of reserves,” said economist Ward McCarthy of Stone & McCarthy Research Associates Inc. “The Fed was expected to drain some of those reserves and they didn’t.”
The federal funds rate, the interest on overnight loans between banks, was quoted at 9.313%, down from 9.375% late Wednesday.
Currency
The dollar closed narrowly higher against all key currencies in thin, uneventful trading after a mixed performance overseas.
Currency dealers said the dollar started out higher as traders looked for bargains following Wednesday’s selloff, which stemmed from continued fears that interest rates will fall because the U.S. economy is slowing.
Gary Lutnick, a trader in the New York office of Banco di Sicilia, said the currency traded in a fairly narrow range throughout the session in anticipation of today’s unemployment data for June, an important indicator of the state of the economy.
“People were trying to limit their exposure due to the unemployment numbers,” he said.
Some dealers said they expected the employment figures to show growth at the rate of about 200,000 in non-farm payroll employment, about double the 101,000 preliminary increase reported for May.
In Tokyo, where trading ends before Europe’s business day begins, the dollar fell to 138.80 Japanese yen from 140.20 yen Wednesday. It traded higher in London at 139.10 yen, and in New York at 138.88 yen, up from 138.40 yen late Wednesday.
The dollar was mixed against the British pound. One pound cost $1.6230 in London, more expensive than Wednesday’s $1.6155. Sterling bought $1.6265 in New York, down from $1.6285.
Gold prices were mostly higher. On the New York Commodity Exchange, gold bullion for current delivery rose 40 cents to $386.40 an ounce. Republic National Bank of New York quoted a late bid for gold at $384.25, down 35 cents from late Wednesday.
Commodities
Raw coffee futures prices slid to new 8-year lows on New York’s Coffee, Sugar & Cocoa Exchange as the battered market reacted to news that an expected freeze in the Brazilian coffee fields had not materialized.
On other markets, sugar futures fell sharply for the second straight day; energy futures fell; pork futures continued to retreat; grains and soybeans were mixed, and precious metals were mixed.
Coffee settled 1.49 cents to 6.62 cents lower, with the contract for delivery in July at 93.38 cents a pound.
The selloff erased all of Wednesday’s gains and deepened the market’s anxiety stemming from the suspension of coffee export quotas Monday by the International Coffee Organization.
Sugar futures lengthened their steep slide on the Coffee, Sugar & Cocoa Exchange. Analysts said the market was correcting from an overbought condition after making strong gains in mid-June.
Sugar settled 0.18 cent to the permitted limit of 0.50 cent lower, with October at 13.12 cents a pound.
Energy futures sagged on the New York Mercantile Exchange on reports that striking maintenance and construction workers planned to return to work today on North Sea oil production platforms.
West Texas Intermediate crude oil was 26 cents to 54 cents lower, with August at $20.30 a barrel.
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