Dow Soars 22.33, Spurred by Falling Interest Rates

The stock market rallied today with a lift from declining interest rates.

The Dow Jones average of 30 industrials, down 16.18 on Tuesday, rebounded 22.33 points to 2,632.58.

Advancing issues outnumbered declines by nearly 5 to 3 on the New York Stock Exchange, with 920 up, 579 down and 468 unchanged.

Big Board volume totaled 155.13 million shares, against 143.17 million in the previous session.

The NYSE’s composite index rose 1.25 to 188.76.

Interest rates fell a bit in the long-term Treasury bond market.

Analysts said traders seemed to be looking ahead hopefully to the monthly report from the government Thursday on the nation’s international trade position.

Estimates on Wall Street call for a September trade deficit of about $9 billion, down from $10.8 billion in August.

Aside from that, brokers said worries persisted about the recent weakening trend of corporate earnings.

Profits for the third quarter, and early indications of likely fourth-quarter results, have contained numerous disappointments, stirring talk of a possible business slump in early 1990.

The Federal Reserve has relaxed its credit policy lately in an evident effort to cushion the effect of a slowdown in the economy. But some observers have questioned whether the Fed acted early enough or emphatically enough to stave off trouble.

U.S. Treasury bonds picked up some modest price gains in early trading today.

The Treasury’s bellwether 30-year bond, unchanged in the previous session, was up around 3/8 point, or $3.75 per $1,000 face amount, by midday.

Its yield, which moves inversely to the price, slipped to 7.85% from 7.88%.

In the secondary market for Treasury bonds, prices of short-term government issues rose between 1/16 point and 1/8 point, intermediate maturities gained 5/32 point to 5/16 point and long-term issues ranged from 5/16 point to 3/8 point higher, according to figures provided by the Telerate Inc. financial information service.

The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

The Shearson Lehman Hutton daily Treasury bond index, which measures price movements on outstanding Treasury issues with maturities of a year or longer, rose 1.67 to 1,197.05.

Yields on three-month Treasury bills fell to 7.87% as the discount fell 3 basis points to 7.63%. Yields on six-month bills fell to 7.77% as the discount declined 5 basis points to 7.39%. Yields on one-year bills slid to 7.65% as the discount lost 3 basis points to 7.17%.

A basis point is one-hundredth of a percentage point. The yield is the annualized return on an investment in a Treasury bill. The discount is the percentage that bills are selling below the face value, which is paid at maturity.

The federal funds rate, the interest on overnight loans between banks, was quoted by midday at 8 11/16%, up from 8 7/16% late Tuesday.