FINANCIAL MARKETS : STOCKS : Dow Rises 18.77 as Pre-Holiday Rally Resumes
The stock market pushed ahead in light trading Friday, resuming the rally that it began before the Thanksgiving holiday.
The Dow Jones average of 30 industrials climbed 18.77 to 2,675.55, bringing its gain for the week to 22.89 points.
Advancing issues outnumbered declines by more than 2 to 1 in nationwide trading of New York Stock Exchange-listed stocks, with 931 up, 447 down and 522 unchanged.
Volume on the floor of the Big Board came to 86.29 million shares, down from 145.73 million Wednesday and the lightest total since 68.87 million were traded on July 3--another session squeezed in between a weekend and a holiday.
Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 103.11 million shares.
Texas Instruments rose 1 3/8 to 37 7/8 in active trading. The stock rallied sharply this week after news surfaced that the company has been awarded a patent in Japan for integrated circuits.
Other gainers among the blue chips included Philip Morris, up 1/8 at 41 1/2; Bristol-Myers Squibb, up 1/4 at 56 3/8; American Telephone & Telegraph, up 1/4 at 43 3/4, and McDonald’s, up 1/4 at 32 7/8.
Texas Air, traded on the American Stock Exchange, jumped 1 1/8 to 13. Pilots and flight attendants ended their strikes against the company’s Eastern Airlines.
Precious-metals stocks were mostly higher as the price of gold extended its recent rally and hit its highest levels in nearly a year at around $419 an ounce. Homestake Mining added 1 1/8 to 19 3/8 and ASA Ltd. 1 to 57 1/8.
Share prices edged higher on London’s Stock Exchange.
In London, the Financial Times-Stock Exchange 100-share index rose 1.9 points, or 0.09%, to close at 2,222.4.
In Tokyo, stocks zoomed to a record close on scattered buying, greased along in late trading by foreign speculators buying shares in the key Nikkei index.
The 225-share Nikkei index rose 197.55 points, or 0.54%, to close at 36,484.47, its third consecutive closing record.
CREDIT
Bonds Edge Up on Interest Rate News
Most bond prices finished slightly higher Friday in thin trading in an abbreviated session, although corporate bonds and some short-term government securities declined.
The Treasury’s closely watched 30-year bond edged up 1/16 point, or about 62 cents for every $1,000 in face value. Its yield was unchanged from late Wednesday at 7.87%.
The market was closed Thursday for the Thanksgiving Day holiday, and many traders also took Friday off. Friday’s trading wound down in the early afternoon, ending several hours before the usual close of bond dealings.
Analysts said bond prices initially were supported by positive follow-through from Wednesday, when the Federal Reserve signaled it was lowering interest rates.
The central bank injected reserves into the financial system Wednesday by making short-term purchases of securities from dealers. Making funds available to the financial system takes pressure off interest rates. Falling interest rates, in turn, boost bond prices.
But after the initial advance Friday, analysts said bond prices lost some strength when the Fed unexpectedly reversed course and drained some reserves from the system.
That action was reflected in a rise in the federal funds rate, the interest on overnight loans between banks, to 8.25% from 8.125% late Wednesday.
In the secondary market for Treasury securities, prices of short-term government issues were unchanged to 1/32 point lower, intermediate maturities rose 1/32 point to 1/8 point and long-term issues were unchanged to 1/16 point higher, according to figures provided by Telerate Inc., a 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 all outstanding Treasury issues with maturities of a year or longer, edged up 0.26 to 1,197.87.
In corporate trading, industrials declined. 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, fell 0.60 to 338.61.
Yields on three-month Treasury bills were unchanged at 7.75% as the discount remained stable at 7.51%. Yields on six-month bills rose to 7.67% as the discount edged up 1 basis point to 7.30%. Yields on one-year bills increased to 7.58% as the discount rose 3 basis points to 7.08%.
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.
COMMODITIES
Pork Futures Rise; Grain Prices Fall
Changes in Eastern Europe continued to support pork futures prices Friday on the Chicago Mercantile Exchange.
The U.S. government bought 280,000 pounds of pork bellies Wednesday to ship to Poland as part of a food-aid package and a recent Yugoslavian purchase of 150,000 metric tons of bellies has stirred hopes for more sales of U.S. pork to Eastern Europe.
Stronger cash markets also boosted the pork markets and the cattle futures markets.
Live cattle settled 0.07 cent to 0.50 cent higher, with the contract for delivery in December at 76.07 cents a pound; feeder cattle were 0.05 cent to 0.42 cent higher, with November at 83.70 cents a pound; live hogs were 0.33 cent to 0.87 cent higher, with December at 51.12 cents a pound, and frozen pork bellies were 0.50 cent to 1.52 cents higher, with February at 64.77 cents a pound.
Grain and soybean futures ended mostly lower on the Chicago Board of Trade, depressed by weakness in the soybean and soybean oil markets.
