FINANCIAL MARKETS : STOCKS : Dow Climbs 26 to Highest Close Since Jan. 11
The stock market shrugged off concerns about the economy and interest rates Thursday, breaking out of its narrow band in the last hour of the session to post a handsome gain.
The Dow Jones index of 30 industrials rose 26.58 points to 2,696.17, its highest close since it stood at 2,760.67 on Jan. 11.
Over the last 11 sessions the index sports a gain of just under 132 points, or 5.1%.
In the broader market, advancing issues outnumbered declines by nearly 2 to 1 in nationwide trading of New York Stock Exchange-listed stocks, with 983 up, 507 down and 476 unchanged.
Big Board volume came to 170.90 million shares, up from Wednesday’s 163.58 million.
Although stocks traded in a narrow range for most of the day, constrained by caution before the release of February employment data this morning, anxiety appeared to evaporate in mid-afternoon trading.
Rising bond prices, lower interest rates, computer-linked buy programs and short-covering spurred the Dow industrials to a smart close, more than overcoming the 7.21-point loss Wednesday.
The Labor Department’s report on employment this morning promises to give investors one of the first signposts of the economy’s performance in February.
Stock prices on the Tokyo Stock Exchange surged higher this morning, drawing strength from technical factors. The blue chip Nikkei 225-share index, gained 600.54 points, or 1.78% closing the morning session at 34,291.43. On Thursday, the Nikkei rose 328.55 points, or 0.98%, to end at 33,690.89.
Share prices rose on London’s Stock Exchange as several healthy good corporate earnings reports gave the whole market a lift. The Financial Times 100-share index rose 19.7 points to close at 2,250.0.
CREDIT Bond Prices Mixed in Cautious Trading Bond prices finished mixed, marking time as most investors waited on the sidelines for today’s employment figures for February.
Most short-term bonds declined slightly, while longer-term issues advanced.
The Treasury’s closely watched 30-year bond gained 5/16 point, or $3.12 for every $1,000 in face value. Its yield, which declines when the price rises, slipped to 8.55% from 8.58% late Wednesday.
Analysts said trading was very light as most bondholders preferred to stay out of the market in advance of the employment report.
“Nothing exciting or earth-shattering,” said Kevin Flanagan, a money market economist at Dean Witter Reynolds Inc. “It was another quiet day in front of the employment report.”
The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8.313%, up from 8.188% late Wednesday.
CURRENCY Dollar Edges Up in Jittery Session The dollar finished mostly higher in extremely quiet domestic trading as investors spent the day on the sidelines wary of provoking the central banks to intervene.
Gold prices slipped in New York after finishing mixed overseas. On the New York Commodity Exchange, gold settled at $400 an ounce, off 20 cents from Wednesday. Republic National Bank of New York later quoted a bid of $399.80, down 80 cents.
Currency trading was lackluster worldwide. “The day never really got started,” said Bob Morrissey, a senior trader with the Bank of Boston in New York. “It was almost like a holiday market.”
Traders said only one factor dampened activity--the threat of central bank intervention. Dealers were surprised on Wednesday when a group of central banks aggressively and repeatedly sold dollars to keep the currency from rising.
The Federal Reserve was believed to have entered the market more than once Thursday to sell dollars against the Japanese yen, but the action was modest compared to the previous session, traders said.
Still, sentiment toward the U.S. currency remains very bullish.
Earlier in Tokyo, the dollar closed at 150.83 Japanese yen, up from 150.75. Later in London, the dollar closed at 150.80 yen. But in New York, the dollar finished at 151.09 yen, up from 150.35 yen on Wednesday.
In London, one British pound cost $1.6427 late Thursday, more expensive for buyers than Wednesday’s late $1.6388. But the dollar gained against the British currency in New York, where one pound cost $1.6385, cheaper than $1.6465 on Wednesday.
Other late dollar rates in New York, compared to Wednesday’s late rates included: 1.7008 West German marks, up from 1.6982; 1.5080 Swiss francs, up from 1.4995; 5.7495 French francs, up from 5.7400; 1,255.25 Italian lire, up from 1,252.75, and 1.1807 Canadian dollars, down from 1.1831.
COMMODITIES Meat Futures Rise on Supply Worries Livestock and meat prices surged for the third consecutive session at the Chicago Mercantile Exchange amid concerns about tight hog supplies.
On other futures markets, grains rallied, but gold, energy products and orange juice contracts all declined.
At the Chicago Merc, the frozen pork bellies contract for delivery in March rose the daily limit of 2 cents after four contracts posted the maximum increases allowed in the previous session.
“The market is reflecting an insufficient supply of hogs to satisfy packer needs,” said Chuck Levitt, an analyst for Shearson Lehman Hutton Inc.
“Packers simply don’t have the hogs they need, and the consumer and investor are paying more,” he said.
The advance in cattle futures prices “was mainly a spillover from the strong pork complex,” Levitt said.
Cattle settled 0.30 to 0.70 cent higher, with the contract for delivery in April at 77.27 cents a pound; feeder cattle were 0.25 to 0.85 cent higher, with March at 81.87 cents a pound; live hogs were 0.05 to 0.65 cent higher, with April at 52.07 cents a pound, and frozen pork bellies were 0.37 cent to 2.00 cents higher, with March at 50.95 cents a pound.
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