STOCKS : Wall St. Ignores Foreign Drops; Dow Up 23.25
The stock market shrugged off broad declines in foreign markets to close higher Tuesday, spurred by gains in technology stocks and news of several takeovers and restructurings.
The rise, aided by late-session program buying, gave nervous investors some respite following a 71-point slide in the Dow Jones index Friday and a 20-point loss Monday.
The Dow Jones index of 30 industrials rebounded 23.25 to 2,692.62.
Advancing issues outnumbered declines by about 8 to 7 in nationwide trading of New York Stock Exchange-listed stocks, with 811 up, 723 down and 454 unchanged.
Analysts said blue chips in particular benefited from bargain hunting after their recent decline, as well as better-than-expected auto sales reports for early January.
In early trading, the Dow index fell 26 points as markets around the world showed losses.
In Tokyo, the Nikkei 225-share index fell 666.41 points, or 1.8%, to 36,850.36. On Friday, before a long holiday weekend in Japan, the Nikkei lost 656.36 points.
Share prices fell sharply on the London Stock Exchange. The Financial Times 100-share index fell 17.1 points to close at 2,349.1.
First Executive tumbled 1 to 6 3/4, a decline of 12.9%, in very heavy over-the-counter trading of more than 2.4 million shares. Smith Barney insurance analysts discontinued rating the company, saying “the market psychology surrounding the stock has deteriorated because of external events in the junk bond market.” First Executive holds a large portfolio of junk bonds.
Big Board volume totaled 186.07 million shares, up from Monday’s 140.59 million.
CREDIT Fed Policy Rumor Sinks Bond Prices Bond prices fell, pushing interest rates higher.
Analysts attributed the loss to a new government report on business inventories and sales and to an unconfirmed rumor that the Federal Reserve had decided not to ease its credit policy for about three months.
The Treasury’s closely watched 30-year bond tumbled about 1/2 point, or $5 for every $1,000 in face value. The bond’s yield, which rises when its price declines, jumped to 8.24% from 8.17% late Friday.
The government bond market was closed Monday for the Martin Luther King Jr. Day holiday.
Bond prices were weakened by the Commerce Department’s report that business inventories rose 0.5% in November while business sales rose 0.7%, said John Sebastian, executive vice president of Clayton Brown & Associates in Chicago.
The federal funds rate, the interest on overnight loans between banks, was quoted at 8.125%, up from 8.063% late Friday.
CURRENCY Dollar, Gold Mixed in Dull Trading The dollar was mixed in lackluster trading amid few developments to affect the currency markets.
Gold prices were also mixed. On the Commodity Exchange in New York, an ounce of gold fell $2.90 to $410.80 an ounce. Republic National Bank of New York later quoted a bid of $409.80, down $5 from late Monday.
Foreign exchange analysts said the dollar fluctuated during the day on largely technical factors.
COMMODITIES Orange Juice Prices Benefit From Report Orange juice futures prices rose sharply following a report that Brazil expects to export about 450,000 metric tons of frozen concentrate to the United States this year, an amount that might not meet U.S. demand.
On other commodity markets, soybean futures fell sharply, energy futures were broadly mixed, precious metals slipped and livestock and meat futures were mixed.
Frozen concentrated orange juice futures rose 2 to 4.35 cents on the New York Cotton Exchange, with the contract for delivery in January at $1.95 a pound.
