STOCKS : Dow Up 10.13 Despite Heavy Selling in Exxon

The stock market moved broadly higher Wednesday, and blue chips managed to extend this week’s winning streak.

The Dow Jones index of 30 industrials, which rose 52.93 during the prior two sessions, gained an additional 10.13 to close at 2,627.25.

The key indicator’s advance came despite heavy selling in Exxon stock after the company’s indictment on criminal charges related to last March’s oil spill off the Alaskan coast.

Periodic rounds of profit taking pared the Dow’s increase. It stood more than 20 points higher at midday before traders decided to sell to collect profits.

Advancing issues outnumbered declining ones in nationwide trading of New York Stock Exchange-listed stocks, with 917 up, 565 down and 495 unchanged.

Big Board volume swelled to 184.41 million shares from Tuesday’s 152.59 million.

Market watchers said stocks continued to benefit from improved investor confidence stemming from Wall Street’s ability to withstand a recent slump in Tokyo without suffering any apparent ill effects.

An upward revision in the government’s estimate of economic activity also helped.

The Commerce Department’s latest reading on the economy came out before the market opened. It showed that the gross national product grew at a 0.9% annual rate in the fourth quarter of 1989, faster than the 0.5% pace previously estimated but still the slowest in more than three years.

The department said its revised estimate of October-December growth means the GNP--the nation’s total output of goods and services--rose 3% for all of 1989. That was the slowest yearly advance since a 2.7% gain in 1986 and followed a 4.4% increase in 1988.

Analysts said the stock market could bump into resistance because of worries about how corporate profits will fare amid prolonged sluggish economic growth.

Among active blue chips, International Business Machines rose 1/8 to 103 7/8, American Telephone & Telegraph added 1/8 to 39 3/4, General Electric moved ahead 1/4 to 61 3/4 and General Motors finished off 1/8 at 44 7/8.

Exxon, another component of the Dow industrial average, tumbled 1 3/8 to 47.

Future Germany Fund, the newest addition to the growing ranks of single-country mutual funds, led the list of active NYSE stocks on volume of more than 8.6 million shares. The stock closed at 19 1/4 on its first day of trading, above the $18-a-share price for its initial offering of 12.5 million shares.

In foreign trading, prices were little changed on London’s Stock Exchange as disappointing British trade figures curbed an advance on a stronger showing by Wall Street. The Financial Times 100-stock index was up 0.6 at 2,255.4.

CREDIT Bond Prices Fall After GNP Report Bond prices tumbled on speculation that the economy might be stronger than expected and that interest rates would rise.

The Treasury’s benchmark 30-year bond dropped 7/8 point, or about $8.75 per $1,000 face amount, while its yield rose to 8.53% from 8.44% late Tuesday.

Sung Won Sohn, chief economist for Norwest Corp. in Minneapolis, said the GNP’s revision reflected stronger net exports and a smaller inventory buildup than had been previously estimated.

Late in the day, rumors circulated among bond traders that the latest survey of the National Assn. of Purchasing Management would indicate that the economy was significantly stronger last month than in the previous month.

Stronger-than-expected economic growth hurts bond prices because it is usually accompanied by rising credit demands, which place upward pressure on interest rates. Higher rates reduce the value of outstanding bonds.

Sohn said the market chose to ignore some upbeat inflation news in the latest report on fourth-quarter economic growth.

The report revised the inflation estimate for the quarter to 3.2% from a previous estimate of 3.5%. Inflation erodes bond prices, and a report that inflation was subsiding would normally boost prices.

The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8.313%, up from 8.25% late Tuesday.

CURRENCY Dollar Goes Higher; Gold Prices Decline The dollar rose against most major currencies after the government released its revision of fourth-quarter GNP.

The dollar traded at an eight-month high against the Japanese yen for the third day despite central bank intervention. Traders said continued concern about the Tokyo stock market depressed the yen.

Gold prices were mostly lower. Republic National Bank of New York quoted a late bid of $406.10 an ounce, down $2.15 from late Tuesday.

The revised GNP figure supported the dollar but was not a major factor because it is a historic number, said Hubert Pedroli, foreign exchange manager for Credit Suisse in New York.

“It only gives us a small indication of what we can expect for 1990, but still, it’s an indication in the sense of sustained growth, not recession,” he said.

The Federal Reserve sold dollars in New York to support the yen when it reached the 149.10 level, but the intervention had only a temporary impact, traders said.

The dollar was boosted against the West German mark by speculation that a plan to unite the currencies of East and West Germany would produce inflation, traders said.

The dollar lost strength as it began its day in Tokyo, falling 0.51 yen to 148.52 yen. But in London, the dollar was quoted higher at 148.75 yen. Later, in New York, the dollar rose to 149.08 yen, up from 148.73 late Tuesday.

The dollar has not closed that high against the yen in New York since June 15, when it reached 151.30 yen.

The dollar also gained strength against the British pound. In London, the pound fetched $1.6895, cheaper than $1.6915 late Tuesday. In New York, it traded at $1.6752, down from $1.6908 late Tuesday.

COMMODITIES Soybean Oil Futures Hit 7 1/2-Month Highs Soybean oil futures bounded to 7 1/2-month highs on the Chicago Board of Trade, boosted by bullish chart signals and stronger domestic demand for soybean oil as an alternative to other fats.

The rally helped pull soybean futures higher. Corn futures also advanced in Chicago, while most wheat futures retreated.

On other commodity markets, petroleum futures slipped, precious metals were mixed, cattle futures advanced and pork futures were mixed.

Soybean oil settled 0.20 to 0.65 cent higher in Chicago, with the contract for delivery in March up 0.56 cent at 21.22 cents a pound, the highest settlement for a near-month contract since July 7.

Soybean futures finished 5 to 7.5 cents higher, with March at $5.665 a bushel.