Dow Advances 15.14 Reviving Hopes for a Rally at Year End
The stock market gained ground today, reviving its bid to mount a year-end rally.
The Dow Jones average of 30 industrials, down 2.13 on Tuesday, gained 15.14 to 2,724.40.
Advancing issues outnumbered declines by about 5 to 3 on the New York Stock Exchange, with 931 up, 549 down and 476 unchanged.
Big Board volume totaled 133.73 million shares, up from 77.61 million in the previous session.
The NYSE’s composite index rose .98 to 192.70.
Analysts found little in the economic news to stir the market out of its recent lethargy. Interest rates were narrowly mixed in the credit markets.
But traders still appeared to be hopeful that stocks might gather strength in early 1990, once year-end maneuvering by investors for tax and portfolio reporting purposes is out of the way.
Worries persist on Wall Street that the economy will encounter rocky going in the early stages of the new year.
However, some analysts are predicting a relatively quick recovery in business activity, given encouragement from a continued easing of the Federal Reserve’s credit policy.
Bond prices steadied in thin trading early today after Tuesday’s steep plunge.
Treasury bonds were unchanged to slightly higher.
The Treasury’s closely watched 30-year bond was up 1/8 point, or $1.25 for every $1,000 in face value, at around midday. Its yield, which declines when the price rises, slipped to 7.97% from 7.99% late Tuesday.
Analysts said the advance was mainly a rebound from Tuesday’s sell-off and didn’t reflect any fundamental trends.
“We’ve seen some bottom-fishing, some buying in a very thin environment,” said William Sullivan, director of money-market research at Dean Witter Reynolds Inc. “It is not a decisive session; it doesn’t provide any fresh insight.”
On Tuesday, bond prices were sent tumbling by fears that surging commodity prices--notably of heating oil and citrus--may ignite inflation. Those concerns were still present today but had abated somewhat, Sullivan said.
In this morning’s trading, prices of short-term government issues were unchanged, intermediate maturities edged up 1/32 point to 1/16 point and long-term issues were unchanged to 1/8 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, was up 0.57 at 1,187.72.
Yields on three-month Treasury bills rose to 8.02% as the discount edged up 1 basis point to 7.77%. Yields on six-month bills tumbled to 7.99% as the discount fell 5 basis points to 7.59%. Yields on one-year bills declined to 7.80% as the discount slipped 1 basis point to 7.28%.
