Financial Markets : STOCKS : Dow Rises 10.03 to End Session Above 2,760
Mild bargain hunting in selected groups, including gold miners, technology and telephone stocks, helped the stock market close with a modest gain Thursday.
Traders said the rise was tempered by caution ahead of the December producer price and retail sales reports due today. Investors also were uneasy about the quality of fourth-quarter corporate results.
The Dow Jones index of 30 industrials, down 43.73 points Tuesday and Wednesday, rose 10.03 to close at 2,760.67.
Advancing issues outnumbered declines by about 3 to 2 in nationwide trading of New York Stock Exchange-listed stocks, with 879 up, 566 down and 535 unchanged.
Big Board volume totaled 154.39 million shares, down from 175.99 million in the previous session.
In Tokyo, program trading jolted the Nikkei index sharply higher at the close Thursday, but volume was modest and the overall market rose less dramatically. The Nikkei 225-share index soared 473.62 points, or 1.26%, to 38,170.13.
Shares closed modestly higher on London’s Stock Exchange, shaking off worries over British inflation with active blue chip buying. The Financial Times 100-share index finished 5.3 points higher at 2,417.9.
CREDIT Bonds Dip as Buyers Await 2 Key Reports Bond prices fell in quiet trading as most investors sat out the session in anticipation of two economic reports.
The Treasury’s closely watched 30-year bond fell 11/32 point, or about $3.43 for every $1,000 in face value. Its yield rose to 8.11% from late Wednesday’s 8.08%.
Analysts said traders were waiting for the government’s release today of wholesale price and retail sales figures for December.
Marshall Front, an economist at the Chicago investment and mutual fund management firm of Stein Roe & Farnham, said traders who were selling Thursday wanted to adjust their holdings before the reports were released.
Bondholders were hoping that the reports indicated continuing economic sluggishness, which could prompt the Federal Reserve to ease credit. That in turn would allow interest rates to fall and bond prices to rise.
But there was concern that if wholesale prices rose more sharply than expected last month, indicating a worsening of inflation, the Fed might be reluctant to ease credit.
The wholesale price report is likely to show the effects of the long December cold snap, which sent energy and food costs higher, Front said.
The federal funds rate, the interest on overnight loans between banks, was quoted at 8.063%, down from 8.25% late Wednesday.
CURRENCY Dollar Depressed by World Affairs The dollar ended slightly lower Thursday after a session in which dealers focused mainly on cross rates between foreign currencies rather than the U.S. currency.
Gold prices rose modestly, with bullion for current delivery gaining $1.60 an ounce to $414 on the New York Commodity Exchange. Republic National Bank of New York quoted a late bid price of $413.60, up $2.35.
Dealers are watching political developments in Eastern Europe closely for signs of instability, which might lead investors to rush into dollars as a safe haven.
At the start of the day in Tokyo, the dollar slipped 0.03 Japanese yen to 145.27. The dollar eased further in London to 145.25 yen before closing in New York at 145.45 yen, down from 145.55 late Wednesday.
The dollar rose slightly against sterling. The British pound fell to $1.6597 late in New York, down from $1.6625. In London earlier, the pound fell to $1.6575 from $1.6625.
COMMODITIES Markets Mixed, but Oil Prices Rebound Grain futures prices fell and soybeans rose on the Chicago Board of Trade. Volume was held down in anticipation of several U.S. Department of Agriculture crop reports.
On other markets, livestock and pork prices were higher, precious metals were mixed and energy futures climbed.
Wheat settled 0.75 cent to 2.50 cents lower, with the contract for delivery in March at $4.0475 a bushel; corn was 2 cents lower to 0.50 cent higher, with March at $2.385 a bushel; oats were 1.75 to 2.75 cents lower, with March at $1.435 a bushel; soybeans were 0.50 cent lower to 2.50 cents higher, with January at $5.6975 a bushel.
Soybean futures were buoyed by a slight rebound in cash prices after farmer selling slowed from the pace set earlier in the week. Soybean prices also were supported by expectations of increased export sales.
Wheat futures continued to show weakness due to the lack of export business. Traders were disappointed that the Soviet Union failed to enter the market Thursday for 500,000 metric tons of winter or spring wheat as expected.
A forecast of weekend rain and the National Weather Service’s latest six- to 10-day outlook that calls for rain in the Central Plains also dragged down wheat prices, said analyst Joel Karlin of Research Department Inc. in Chicago.
Corn futures traded in a narrow range, as traders marked time before the release of the USDA reports after the close of trading.
The USDA estimated the 1989 corn crop at 7.5 billion bushels, which was below expectations.
Soybean production was put at 1.9 billion bushels, also lower than expected.
The USDA reported farmers planted about 57 million acres of winter wheat for harvest this year, up 3% from 1989.
Winter wheat is planted in the fall and harvested the following year. It accounts for about three-fourths of the total U.S. wheat output. Meanwhile, U.S. wheat stockpiles have continued to shrink, thus keeping market prices at high levels.
Energy futures rebounded from losses suffered in early trading to post a gain on the New York Mercantile Exchange.
The gain was led by heating oil futures, which surged on expectations of a return of cold weather in the Northeast, said analyst Peter Beutel of Elders Futures Inc. in New York.
West Texas Intermediate crude oil was 9 cents lower to 24 cents higher, with February at $23.14 a barrel; heating oil was 0.33 cent to 2.44 cents higher, with February at 69.32 cents a gallon; unleaded gasoline was 0.57 cent to 1.17 cents higher, with February at 65.50 cents a gallon.
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