Dow Gains a Fraction in Erratic Session
The stock market inched higher in a seesaw session Monday as fresh interest in takeover stocks was largely overshadowed by concerns about the economy and weak corporate profits.
The Dow Jones index of 30 industrials eked out a 0.82 gain to 2,626.43.
Advancing issues outnumbered declines in nationwide trading of New York Stock Exchange-listed stocks, with 812 up, 675 down and 472 unchanged.
Analysts said many traders remained hopeful that the Federal Reserve Board’s gradual relaxation of its credit policy would soften the impact of the recent slowing of economic growth.
However, interest rates were little changed in Monday’s credit market activity.
Some observers believe that the market in general stands to benefit from the opening up of borders in Germany, which continued to make headlines over the weekend.
But the most notable response among investors has been confined so far to stocks of a few companies with extensive operations or investments in West Germany.
Germany Fund, a closed-end investment company whose shares were very strong late last week, pulled back 3/4 to 12 3/4.
On the takeover front, Combustion Engineering led the NYSE active list, up 13 1/2 at 39. Asea Brown Boveri Ltd. reached a definitive agreement to buy the company for $40 a share.
Dallas Corp., which agreed to be acquired by a subsidiary of Bessemer Securities for $24 a share, jumped 9 1/2 to 23 5/8.
Avon Products dropped 1 1/2 to 35 after the company said it wasn’t interested in being acquired. The stock ran up 5 1/2 points on Friday on word that an investor group had bought a stake of more than 5% in Avon.
Tesoro Petroleum, which said its directors voted to look into the possibility of a takeover, gained 1 to 10 7/8.
Big Board volume came to 140.75 million shares, against 131.80 million in the previous session.
In Tokyo, the Nikkei stock index inched up to a record closing high in scattered, moderate trade. The key 225-share index gained 86.92 points to close at 35,750.12.
On the London Stock Exchange, stocks surrendered most of their early modest gains. The Financial Times 100-stock index ended 3.5 points lower at 2,213.2.
Credit
Bond prices were mostly higher after what traders called a successful Treasury refinancing auction of $10 billion in 10-year notes.
The Treasury’s benchmark 30-year bond gained 1/8 point, or $1.25 per $1,000 face amount. Its yield, which falls when prices rise, dipped to 7.88% from 7.89% late Friday.
Traders said foreign investors, including the Japanese, gave a warm reception to the auction of 10-year notes. Yields on the notes fell to their lowest level in 33 months.
The average yield for the 10-year notes was 7.94%, down from 8.03% at the last auction on Aug. 9. The auction was part of the government’s quarterly refunding postponed last week by Congress’ delay in raising the debt limit.
The federal funds rate, the interest on overnight loans between banks, was quoted late in the day at 8.385%, unchanged from late Friday.
Currency
The dollar drifted lower against all major currencies as traders were preoccupied with the West German mark.
Gold prices firmed. Republic National Bank of New York quoted an ounce of gold bullion at $390.10 as of 4 p.m. EST, $3.85 higher than Friday’s late bid. On the Commodity Exchange in New York, gold for current delivery gained $4.20 to settle at $391.
Foreign exchange dealers said there was little interest in either buying or selling dollars.
In overseas trading, the dollar gave a mixed performance.
The dollar began its trading day in Tokyo by rising to a closing level of 143.55 Japanese yen from 142.75 yen at Friday’s close. Later, in London, the dollar rose to 143.68 yen. In New York, the dollar finished at 143.925 yen, up from 143.40 yen.
The dollar fell against the British pound. In London, the British pound rose to $1.5805 from $1.5765 late Friday. In New York, one pound cost $1.582, more expensive for buyers than Friday’s $1.5773.
