Financial Markets : Dow Rebounds 9.86 During Sleepy Session
The stock market finished slightly higher Tuesday after struggling through a featureless session.
“It was a yawning affair,” said Edward P. Nicoski, a technical analyst for the Piper Jaffray & Hopwood Inc. investment firm.
The Dow Jones index of 30 industrials rose 9.86 to 2,687.78. The index had declined a total of 34.71 in the previous two sessions, retreating from near-record highs.
Advancing issues outnumbered declines by about 7 to 6 in nationwide trading of New York Stock Exchange-listed stocks, with 809 issues up, 689 down and 501 unchanged.
Big Board volume totaled 148.77 million shares, up from 142.01 million Monday.
Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 179.425 million shares.
The market zigzagged through most of the session. Analysts said there was some profit taking but overall little selling pressure as many participants withdrew from the market to await more information on the economy.
“The market is looking for new impetus,” said Eugene Peroni, technical analyst with Janney Montgomery Scott in Philadelphia. “The market vacillations seem to suggest that traders are looking for a new comfort level at which to buy.”
Blue chip stocks came alive in afternoon trading, pushed higher by computerized trading strategies.
Economy-sensitive and industrial stocks posted gains, reflecting what some strategists called an improved outlook.
“People feel the worst of the industrial downturn is upon us,” said Michael Metz, equities analyst with Oppenheimer & Co.
Among actively traded issues on the NYSE, Smith Corona rose 1/4 to 18 1/4, Ford Motor gained 7/8 to 51 and General Motors advanced 1 1/8 to 45 1/2.
UAL fell 4 1/4 to 254 1/4, reflecting some emerging doubt about the chances of a takeover bidding war for the airline company. USX also fell 3/8 to 34 7/8, and Philip Morris lost 1 5/8 to 157 5/8.
Tokyo stock prices ended higher, ending a three-day losing streak, but trading was thin with many players off for the traditional mid-August holidays. The Nikkei 225-share index rose 139.07 to close at 34,810.69, after slipping 41.34 Monday.
Share prices ended slightly higher on London’s Stock Exchange after a session in which prices moved within a narrow range in thin, cautious trading. The Financial Times 100-share ended up 0.3 at 2,326.2.
Credit
Bond prices rose, recovering some ground after consecutive sell-offs as traders sought bargains amid continued concern about interest rates and the economy’s direction.
The Treasury’s bellwether 30-year bond, which lost more than $25 on Friday and Monday, gained $7.50 per $1,000 face value, or 3/4 point. Its yield fell to 8.15% from 8.23% late Monday.
Government bonds of shorter maturities had more modest price gains, while some corporate bonds were lower.
Market analysts attributed the small rebound mainly to bargain hunting after the recent steep losses, not to any change in market sentiment.
Credit market strategists said the market’s tenor may be set by the release of figures on housing starts today, trade data Thursday and the consumer price index Friday.
“I don’t think anybody’s going to take any significant positions ahead of the release of the economic data over the next few days,” said money market economist Kevin Flanagan at Dean Witter Reynolds.
In the secondary market for Treasury bonds, prices of short-term issues were up 5/32 point to 5/16 point, intermediate securities rose 7/16 point to 9/16 point and long-term issues ranged from 5/8 point to 27/32 point higher, according to Telerate Inc., the financial-information service.
The movement of a point equals a change of $10 in the price of a $1,000 bond.
Yields on three-month Treasury bills fell to 8.27%, as the discount lost 1 basis point from levels at Monday’s auction to 8%. Yields on six-month bills rose to 8.27%, as the discount was unchanged from Monday’s auction at 7.84%. Yields on one-year bills fell to 8.27%, as the discount fell fell 7 basis points to 7.70%.
The federal funds rate, the interest on overnight loans between banks, traded at 9.125%, up from 9% late Monday.
Currency
The dollar ended mixed in choppy trading after a modest rise overseas.
Gold prices firmed. On the Commodity Exchange in New York, gold bullion for current delivery closed up $3.60 at $370.70 an ounce. Republic National Bank of New York quoted a late bid at $368.50, up $3.80 from Monday.
Dealers said the dollar remained locked into a fairly narrow trading range in anticipation of data that should shed more light on the economy and the short-term outlook for U.S. interest rates.
The dollar has been boosted in recent days on speculation that interest rates won’t fall any time soon. When rates remain firm, dollar-denominated securities, such as bonds, become more attractive to foreigners, and that increases the need for those investors to exchange their currencies for dollars.
In Tokyo, where trading ends before Europe’s business day begins, the dollar rose for the fourth consecutive trading day to 142.20 Japanese yen from 141.93 yen. It traded at 142.30 yen in London and at 142.15 yen in New York, up from 141.925 Monday.
The British pound weakened in London, falling to $1.5735 from $1.5840 late Monday. Sterling fetched $1.5768 in New York, down from $1.5770.
Commodities
Prices of grain and soybean futures rose on the Chicago Board of Trade on reports of deteriorating crop conditions.
On other markets, copper futures continued to rally, energy issues were up, precious metals prices climbed, livestock futures were down and pork futures prices were mixed.
Wheat settled 2 to 5.75 cents higher, with the contract for delivery in September at $3.9925 a bushel; corn was 2.50 to 6.50 cents higher, with September at $2.3425 a bushel; oats were 3.25 to 4 cents higher, with September at $1.395 a bushel, and soybeans were 11 to 20 cents higher, with August at $6.225 a bushel.
Analysts say Monday’s crop ratings from the Department of Agriculture showed a decline in the condition of the soybean crop--particularly in Iowa and Illinois--due to a lack of moisture.
Soybean prices were also supported by the National Weather Service’s 30-day forecast--released Monday--which calls for below-normal precipitation and above-normal temperatures.
Corn futures were boosted by the announcement that Mexico would be in the market for 400,000 metric tons of corn and rumors that the Soviet Union also will enter the market.
Copper continued its climb on New York’s Commodities Exchange, amid fears of a shortage in supplies.
Energy futures were up in lifeless trading on the New York Mercantile Exchange.
“The market is looking for something to shake it out of its lethargy,” said Andrew Lebow, an analyst with E. D. & F. Man International Futures Inc. in New York. “It doesn’t appear as though there is anything on the horizon that will do that.”
West Texas Intermediate crude oil was 2 to 10 cents higher, with September at $18.68 a barrel; heating oil was 0.02 to 0.24 cent higher, with September at 50.28 cents a gallon, and unleaded gasoline was 0.03 cent lower to 0.20 cent higher, with September at 52.06 a gallon.
