STOCKS : Week Ends on High Note; Dow Advances 11.52
Stock prices closed out a zigzag week Friday with a moderate rise that analysts described as a technical rally.
The Dow Jones index of 30 industrials gained 11.52 to 2,677.90, reducing its loss for the week to 11.31 points.
Advancing issues outnumbered declines by about 5 to 4 in nationwide trading of New York Stock Exchange-listed stocks, with 830 up, 656 down and 477 unchanged.
Stock prices began to stabilize late in Thursday’s session, when buying of blue chips enabled the market to finish mixed after a broad early retreat.
Analysts said traders’ spirits brightened Friday as interest rates dropped back a bit in the government securities market after their steady rise of the past few weeks.
But considerable skepticism lingered on the Street about the staying power of any rally attempt.
Corporate earnings reports issued to date for the fourth quarter of 1989 have contained some even bigger disappointments than traders were expecting.
In addition, rising interest rates in Japan, West Germany and other industrialized countries have intensified speculation about the possibility of an international business slump in the months ahead.
Digital Equipment dropped 4 1/4 to 77 3/4 on top of a 5 7/8-point loss Thursday, when the company posted a quarterly earnings decline that was sharper than many observers had expected.
Bank of New England led the active list, down 1 1/2 at 2 3/4. The company said it expects to report losses exceeding $1 billion for the fourth quarter and for all of 1989.
Bank of New England’s mounting woes touched off widespread selling in the stocks of other Northeastern bank holding companies.
Citytrust Bancorp fell 1 5/8 to 9 3/8; Bank of Boston was down 1 5/8 to 15 1/2; Shawmut National was off 1 1/8 to 15 7/8, and First Fidelity Bancorp dropped 1 3/4 to 21.
Among New York City banking issues, Citicorp lost 1/2 to 26; J. P. Morgan fell 1/2 to 37 1/8; Manufacturers Hanover dipped 1/4 to 33 3/4, and Chemical Banking lost 1/8 to 28 7/8.
Many energy stocks, by contrast, rose on the day. Exxon was up 5/8 to 48 5/8; Chevron added 1 to 67; Amoco gained 1 3/4 to 52 3/8; Schlumberger increased 1 to 48 3/8, and Halliburton rose 1/2 to 41 1/8.
Big Board volume totaled 185.59 million shares, up from 178.59 million on Thursday.
Stock prices closed mixed in moderate trading on the Tokyo Stock Exchange as some last-minute futures-linked buying lifted the key Nikkei indicator to end its four-day slide. The Nikkei 225-share average climbed 107.08 points to close at 36,836.54. For the week the key index tumbled 680.23 points, or about 2%.
Stock prices also put in a mixed performance on London’s Stock Exchange. The Financial Times 100-share index closed 1.9 points at 2,335.0.
CREDIT Foreign Buyers Return to Bonds Bond prices gained ground thanks to foreign buying following a steep selloff the day before.
The Treasury’s closely watched 30-year bond rose 21/32 point, or $6.56 for every $1,000 in face value. Its yield, which falls when prices advance, slipped to 8.26% from 8.33% late Thursday.
Analysts said much of the improvement came in overseas trading of U.S. government securities in Tokyo and London before the New York market opened. Tokyo traders had been selling U.S. securities to make profits and offset losses in the struggling Japanese stock and bond markets.
But on Friday “the Bank of Japan bought Japanese government bonds during the Tokyo session,” said Kathleen Camilli, a money market economist with Drexel Burnham Lambert Inc. “That helped to support our market as well.”
“It does look like we’ve reached (bond price) levels where we’re attracting some foreign demand,” said William V. Sullivan, director of money market research at Dean Witter Reynolds Inc.
The federal funds rate, the interest on overnight loans between banks, was quoted at 8.125%, unchanged from late Thursday.
In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds closed at 92 5/16, up 1/16 point. The average yield to maturity fell to 7.35% from 7.36% late Thursday.
CURRENCY Canadian Dollar Dominates Market The U.S. dollar was mostly lower against other major currencies in trading that was dominated by the Canadian dollar. Gold prices moved lower.
Analysts said trading in the U.S. dollar was quiet. Ronald Holzer, chief dealer with Harris Trust & Co. in Chicago, said the foreign-exchange markets focused on the Canadian dollar, which has fallen throughout the week in response to the Bank of Canada’s decision to ease its monetary policy and allow interest rates to decline.
At the close of trading in New York, the U.S. dollar was worth 1.1836 Canadian dollars, up from 1.1713 late Thursday and 1.1573 a week earlier. In European trading, the U.S. dollar closed at 1.1786 Canadian dollars, up from late Thursday’s 1.1713.
Ken Foxcroft, senior vice president at Toronto-Dominion Bank, said, “Interest rates in Canada are starting to ease while rates in the rest of the world are continuing to move up, so a lot of the attraction of investing in Canada is disappearing.”
Analysts attributed some of the declines in the U.S. dollar to profit taking ahead of the weekend.
The dollar fell against the British pound. In London, one British pound cost $1.6475 late Friday, more expensive for buyers than Thursday’s late $1.6445. In later New York trading, a pound cost $1.6470, compared to late Thursday’s $1.6435.
Other late dollar rates in New York, compared to late Thursday’s rates, included: 1.7105 West German marks, down from 1.7150; 1.5205 Swiss francs, down from 1.5245; 5.8130 French francs, down from 5.8275, and 1,274.12 Italian lire, down from 1,276.25.
In Tokyo, the dollar closed at 146.33 Japanese yen, up from 145.66 yen. In late London trading the dollar closed at 145.60 yen, and in New York, the dollar fell to 145.925 yen from late Thursday’s 146.35 yen.
Tables begin on D5
