FINANCIAL MARKETS : Traders’ Optimism Nudges Dow Up 5.69

From Times Wire Services

Stock prices posted their eighth straight gain Thursday as traders waited hopefully for new signs of a slowing economy.

The Dow Jones index of 30 industrials, which closed Wednesday at a new post-crash high, rose 5.69 to 2,538.32.

That extended the index’s gain so far this month to 98.26, leaving it about 184 points short of the record close of 2,722.42 reached Aug. 25, 1987.

Advancing issues outnumbered declines by about 6 to 5 in nationwide trading of New York Stock Exchange-listed stocks.


Big Board volume totaled 153.80 million shares, down from 160.55 million Wednesday.

Analysts said traders were looking ahead optimistically to several economic reports due from the government today, including monthly statistics on industrial production and the producer price index of finished goods.

The figures are expected to provide further confirmation that economic growth is slowing, fulfilling a primary goal of the Federal Reserve’s credit policy.

Investors were likely to give especially close scrutiny to the report on producer prices which, if it lives up to its advance billing, will show a slackening of inflationary pressures.


Estimates on Wall Street call for the index to be up about 0.3% for June, compared to a 0.9% jump the month before.

As had happened Wednesday, the market encountered some mild selling in the first half of the session but then resumed its advance in afternoon trading.

Honeywell, widely discussed of late as a possible takeover candidate, jumped 6 1/2 to 86.

Other gainers among the blue chips included Eastman Kodak, up 1 3/8 at 48 3/4; Walt Disney, up 7/8 at 99 3/4; Union Carbide, up 3/4 at 27 7/8, and General Motors, up 3/8 at 42. GM shares got a boost from better-than-expected domestic car sales for early July.


Westinghouse Electric rose 1 to 65 1/4. The company reported second-quarter earnings of $1.56 a share, up from $1.47 a share in the comparable period last year.

On the Tokyo Stock Exchange, share prices closed lower in dull trading, pushed down in the afternoon by futures-related selling. The key Nikkei index eased 70.36 to close at 33,631.16. Share prices rose slightly on the London stock exchange in tentative, volatile trading. The Financial Times 100-share index rose 1.3 to close at 2,258.0.


Bond prices dipped slightly as traders awaited today’s economic reports.


The Treasury’s benchmark 30-year bond fell 7/32 point, or about $2.18 per $1,000 face amount. Its yield edged up to 8.04% from 8.03% late Thursday.

The federal funds rate, the interest on overnight loans between banks, traded at 9.313%, unchanged from late Wednesday.


The dollar moved mostly higher against major foreign currencies in choppy trading before today’s potentially market-moving economic reports.


Gold prices declined. On the Commodity Exchange in New York, gold bullion for current delivery fell $1.70 to $377 an ounce. Republic National Bank of New York quoted a late bid of $375.50, down from Wednesday’s late bid of $377.40.

Activity in the foreign exchange markets featured dealers adjusting their holdings in anticipation of the economic reports.

“I think people feel the statistics will be pointing to a weaker economy and hence a weaker dollar,” said Bob Morrissey, a trader in the Bank of Boston’s New York office.

Despite this perception, the dollar finished higher against most currencies except the Japanese yen. The dollar’s strength was a byproduct of dealers’ desires to lighten their holdings of West German marks, mainly so they could buy more yen.


In Tokyo, the dollar fell to 139.05 Japanese yen from 140.50 late Wednesday. In London late Thursday, the dollar traded higher at 139.20, and in New York, the dollar ended at 139.45 yen, down from 139.60 yen Wednesday.

In London, one British pound closed at $1.6240, cheaper for buyers than Wednesday’s late level of $1.6255. Sterling fetched $1.6205 in New York, compared to $1.6300 on Wednesday.


Prices of soybean futures rebounded on the Chicago Board of Trade after news of a legal challenge to the exchange’s order that traders liquidate their holdings in the July soybean contract.


Wheat and oat futures also advanced, while corn futures finished mixed.

On other markets, sugar futures soared amid rumors of Soviet buying, cattle futures were up sharply, pork futures were mixed, energy futures advanced and precious metals were mixed.

Soybeans settled 10 cents to 17.5 cents higher, with the contract for delivery in July up 11 cents at $6.975 a bushel.

Two subsidiaries of Italian agribusiness giant Ferruzzi Finanziara S.p.A. filed a lawsuit in U.S. District Court in Chicago seeking an injunction against the Board of Trade’s emergency directive.


The exchange’s order, issued Tuesday, was widely seen as an attempt to block an attempt by Ferruzzi to control the soybean market.

Soybeans had opened strongly higher on Wednesday’s government report of smaller-than-expected soybean plantings, but the market had eased by midday on profit taking. Wire service reports of Ferruzzi’s lawsuit appeared at about 1 p.m. CDT.

Tables begin on Page 4