Dow Continues Setting Marks; Trading Slow
Stock prices rose in a quiet session Monday, resisting early profit taking as blue chips notched up their fifth straight record closing high.
The Dow Jones industrial index rose 5.89 points to close at 2,791.41, after surging 92.70 points last week. Advancing issues slightly outnumbered declines in nationwide trading of New York Stock Exchange-listed stocks, with 705 up, 657 down and 546 unchanged.
Big Board volume was 86.81 million shares, down from 172.52 million Friday and the lightest total since a 68.87-million-share day on July 3, which was a session sandwiched between a weekend and Independence Day.
A quiet day had been expected in the absence of many market participants for the Columbus Day and Yom Kippur holidays.
Analysts said those traders who were on hand were apparently taking a moment to pause and reappraise the outlook for the economy and interest rates.
Recent evidence of only sluggish growth in the economy and a strong dollar in foreign exchange have prompted talk of increasing prospects for an easing of the Federal Reserve credit policy.
But many observers have cautioned that the Fed is likely to act only cautiously and gradually, in keeping with the style of Fed Chairman Alan Greenspan.
Computer and technology issues continued their rebound of the past couple of sessions from a selloff that followed an earnings disappointment at International Business Machines.
IBM rose 1 3/4 to 109 1/4, Compaq Computer was up 6 to 104 5/8, Digital Equipment increased 1 7/8 to 93 1/2 and Hewlett-Packard rose 1 1/8 to 51 1/4. Walt Disney Co. jumped 6 1/4 to 134 1/8.
Other gainers among the blue chips included Philip Morris, up 3/4 at 179 3/8; Exxon, up 1/4 at 45 5/8; USX, up 1/8 at 38 5/8; Procter & Gamble, up 2 3/4 at 131 3/4, and Du Pont, up 1 1/2 at 122.
Blue chip stocks led a rebound in the Tokyo market from a selloff at the end of last week. The 225-share Nikkei average rose 167.00 points to close at 35,376.35.
In London, stocks fell sharply in reaction to a steep slide by the pound, dealers said, raising concerns that interest rates may be headed higher. A lower opening on Wall Street also dented confidence on the London stock market, they added. The Financial Times 100-share index ended 30.5 points down at a three-month low of 2,247.0.
Credit
Corporate bond prices edged higher but trading was very light as the U.S. market for Treasury issues closed for the Columbus Day holiday.
Moody’s investment grade corporate bond index, which measures total return on a portfolio of 80 corporate bonds with maturities of five years or longer, rose 0.08 to finish at 333.58.
But the domestic market for Treasury bills, notes and bonds was closed, as were many banks. In Europe, prices of Treasury issues were slightly higher, according to Telerate Inc., a financial information service.
Currency
The dollar turned narrowly mixed in thin holiday trading.
Gold prices were lower.
On the Commodity Exchange in New York, gold bullion for current delivery closed at $363.10 an ounce, down 60 cents from Friday. Republic National Bank of New York quoted a late bid for gold at $362.50 an ounce, off 75 cents.
Taking the spotlight was the British pound, which sank below 3 West German marks in Europe for the first time in 18 months, despite last week’s rise in base lending rates in line with similar rate hikes across Europe.
Some London dealers said they were worried that the British government’s anti-inflation strategy might tilt the nation’s economy into a recession.
The pound closed at $1.5775 in London, down from $1.6030 on Friday. Sterling fetched $1.5775 in New York, lower than $1.6055 on Friday.
In Tokyo, where trading ends before Europe’s business day begins, the dollar fell 0.22 Japanese yen to a closing 142.23 yen. It traded at 142.80 yen in London, and at 142.85 yen in New York, up from 142.35 yen on Friday.
Gold fell in London to a late bid of $362.75 an ounce from $363.25 on Friday, but it was unchanged in Zurich, Switzerland, at $362.80.
Commodities
Grain and soybean futures prices closed lower as traders reacted to news that the weekend saw near-perfect harvesting conditions.
On other markets, cotton prices were sharply lower, precious metals drifted lower, livestock and pork futures were mixed, energy futures were higher and coffee prices continued to drift lower.
Trading on the nation’s commodity exchanges was thin due to the Yom Kippur and Columbus Day holiday.
Wheat settled 3.5 to 5.25 cents lower, with the contract for delivery in December at $4.0625 a bushel; corn was 2.5 to 4 cents lower, with December at $2.35 a bushel; oats were 3 to 3.50 cents lower, with December at $1.40.50 a bushel, and soybeans were 7.25 to 11.75 cents lower, with November at $5.5675 a bushel.
November and January soybeans drifted to contract lows in light trading at the Chicago Board of Trade, reflecting the harvest news.
Adding pressure to prices was the expectation that the Agriculture Department’s crop report due out Thursday will have an upward revision of the crop production estimate, said William Biedermann, an analyst with Allendale Inc. in Chicago.
Corn prices were pressured by the belief that there will be little additional business from the Soviet Union. The USDA announced late Friday that the Soviets have purchased 1.1 million metric tons of corn.
There is little prospect of more business from the Soviet Union, Biedermann said.
Wheat prices were undermined by a spillover effect from soybeans and a lack of export demand.
Cotton prices closed sharply lower on New York’s Cotton Exchange as moderating weather conditions in the delta cotton growing region prompted profit taking by commission houses.
Weather forecasts had indicated that temperatures would drop below freezing in crop growing areas over the weekend. However, temperatures remained above freezing.
Cotton was 0.41 cent to 1.47 cents lower, with October at 74.53 cents a pound.
