STOCKS : Dow Up 36.26 After Tokyo Market Rally
The stock market saw a rebound in the Tokyo stock market and built it into a full-blown rally Tuesday, leaving stock prices sharply higher at the close of trading.
Aided by a broad-based buying spree, the Dow Jones index of 30 industrials closed up 36.26, or 1.34%, at 2,736.71.
In the broader market, advancing issues outnumbered declining ones by more than 2 to 1 in nationwide trading of New York Stock Exchange-listed stocks, with 1,071 up, 431 down and 468 unchanged.
Big Board volume rose to 154.31 million shares, up from 124.36 million Monday.
In Japan, prices on the Tokyo Stock Exchange jumped Tuesday in nervous, roller-coaster trading. The 225-share Nikkei index gained 757.65 points, or 2.7%, ending the day’s session at 28,759.72.
Tokyo share prices climbed this morning to end the first session of the day with modest gains as Tuesday’s rebound continued. The Nikkei index firmed 212.05 points or 0.74%, to 28,971.77 during the morning in moderate trade.
Analysts said the link between the Tokyo and New York markets is not as strong as once believed. They also said most of the trouble on the Japanese exchange is due to domestic concerns, including interest-rate worries and a belief that stocks are overpriced compared to earnings.
The market got a boost from comments by a U.S. Treasury official, who pointed to the possibility of lower interest rates ahead.
Senior Deputy Assistant Treasury Secretary John Niehuss, speaking in Montreal, said inflation signals, while somewhat mixed, suggest a decline in U.S. inflation over the course of the year, creating the “right environment” for lower U.S. interest rates.
The stock market shrugged off a 1% fall in the government’s main gauge of future economic growth in February. Investors are more focused on upcoming data, such as Friday’s unemployment report for March.
“They (the leading indicators) were nothing that would throw the market into a tizzy,” said Bob Walberg, an analyst at MMS International.
Investors appeared to be using the market’s recent weak spell as an entry point. But some analysts remained skeptical of the market’s strength, especially in light of gloomy earnings forecasts and lingering uncertainty about the U.S. economy.
Unocal, the second-most-active issue, dropped 1 5/8 to 32 after a Merrill Lynch analyst lowered his earnings forecast for the oil company and others said they were less bullish on the stock. Unocal has been the subject of takeover rumors in recent days.
Other oil stocks advanced: Exxon rose 7/8 to 47 1/8, ARCO jumped 1 3/4 to 118 and Chevron added 7/8 to 67 7/8.
Among active stocks, Pic N Save jumped 1 to 11 1/2, though the L.A.-based retailer had no explanation. A Kidder Peabody trader said the action was spurred by some large institutional buyers.
Mattel rose 1 1/8 to 21 7/8, a new 52-week high.
Philip Morris was the most-active NYSE issue, with 2.5 million shares changing hands as the stock rose 1 3/8 to 40 7/8.
Among other active blue chips, Eastman Kodak rose 1 1/2 to 40 1/2, General Electric gained 1 to 65, Exxon rose 7/8 to 47 1/8 and IBM rose 3/4 to 106 5/8.
Prices also closed higher on London’s Stock Exchange, boosted by the strong opening on Wall Street. At the close, the Financial Times 100-share index was up 19.1 points at 2,240.7.
CREDIT Bond Prices Higher on Economic News In the credit markets, bond prices finished with small gains Tuesday in a muted reaction to a big decline in the government’s main forecasting gauge.
Analysts said traders were staying out of the market in anticipation of a potentially market-moving report due Friday on March employment trends.
The benchmark 30-year Treasury bond rose 3/16 point, or about $1 for every $1,000 in face value. Its yield, which falls when prices rise, edged down to 8.61% from 8.62% late Monday.
The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8.313%, unchanged from late Monday.
CURRENCY Dollar Closes Mixed in Slow Trading The dollar finished mixed against major foreign currencies in light trading as dealers lacked incentives to buy or sell heavily.
Currency dealers said the dollar traded in a narrow range for much of the day. Renewed demand to buy dollars against the Japanese yen in particular surfaced in afternoon domestic trading and pushed the dollar higher.
The dollar ended in New York at 159.76 yen, up from 158.65 yen on Monday. But in Tokyo trading, which ends as Europe’s business day begins, the dollar declined to 158.95 yen, 1.00 yen lower than Monday’s close. In London, the dollar traded at 159.10 yen.
Richard Levine, a vice president at Elders Futures Inc., said trading was generally light. There were no fundamental developments that caused any shift in sentiment toward the dollar.
Although worries about German unification and questions about Japan’s ability to support the sagging yen tended to support the dollar, those factors did not provoke fresh dollar buying in Europe, dealers said.
The British pound was quoted at $1.6345 late in London, up from $1.6300 late Monday. In New York, sterling fell to $1.6358 from $1.6390 late Monday.
COMMODITIES Gold Futures Climb on Mideast Buying Gold futures prices rose sharply in a burst of Middle Eastern buying, possibly by some of the same investors whose sale last week of at least a million ounces of the metal triggered a collapse in prices to 4 1/2-month lows.
On other commodity markets, copper futures rose sharply; cocoa futures surged; grains and soybeans advanced; oil futures were mixed, and livestock and meat futures were mixed.
Gold futures settled $5.50 to $5.90 higher on New York’s Commodity Exchange, with the contract for delivery in April at $375.30 an ounce; silver futures finished 6 to 6.4 cents higher, with April at $5.007 an ounce.
Analysts said heavy buying of gold bullion occurred overnight in Tokyo and London.
