Dow Leaps Then Fades, Closes Ahead Only 4.75
The stock market finished higher today, but it fizzled badly in the last hour of trading, giving up most of the day’s gains.
The Dow Jones average of 30 industrials closed up 4.75 points 2,663.94.
Advancing issues outnumbered decliners by a margin of about 7 to 6 on the New York Stock Exchange, with 732 issues up, 629 down and 546 unchanged.
Big Board volume totaled 158.35 million shares, against 121.13 million in the previous session.
The NYSE’s composite index rose 0.19 to 191.47.
At the American Stock Exchange, the market value index added 0.79 to finish at 382.19.
Up More Than 21
The market opened strong in response to a government report that showed surprising strength--a 3.8% increase--in new factory orders for durable goods. The market had expected a slight decline.
“The market did mainly what it has been doing the last few weeks, following interest rates,” said L. Crandall Hays, equities analyst with Robert W. Baird & Co. The stock and bond markets fell Monday as the dollar plunged, with central banks intervening to push the currency lower, and interest rates rose.
“Interest rates were up yesterday. Today the pressure is off,” Hays said.
The market had recouped most of its losses from Monday, with the Dow Jones Industrial Average up more than 21 points at one point, before a sharp pull-back in the final hour of trading. The Dow Jones average dropped 22.42 points on Monday.
Blue-chip issues led the broad-based rally. Entertainment stocks were active after Monday’s reports that Columbia Pictures Entertainment was in takeover talks with Sony Corp. of Japan.
Computerized trading strategies and buying by big institutions in the final week of the third quarter helped buoy prices during much of the session.
Analysts said the stock market’s ability to show strength without a similar response in the bond market was encouraging. The credit market posted only a slight change after the durable goods report.
Nevertheless, Wall Street analysts said the stock market still lacked strong leadership.
“There’s no firm conviction,” said Emmanuel Geronimous, analyst with Shearson Lehman Hutton Inc.
Bond prices fell slightly in early trading today amid continued concern about the dollar and the market’s ability to digest a new supply of notes and bonds.
The Treasury’s closely watched 30-year bond was down 1/16 point, or 62 cents for every $1,000 in face value, at around midday. Its yield, which rises when prices fall, edged up to 8.29% from 8.28% late Monday.
Bond prices fell sharply Monday after central banks attacked the dollar. The 30-year bond had lost more than a point, its biggest daily decline since mid-August.
Finance officials from the Group of Seven nations met Saturday in Washington and agreed that the dollar should not rise from current levels.
