STOCKS : Early Market Loss Reversed; Dow Gains 9.01
Stock prices ended mixed in moderate, quiet trading Tuesday after overcoming earlier losses.
The Dow Jones index of 30 industrials rose 9.01 to 2,731.08.
Declining issues barely nudged out advancing ones in nationwide trading of New York Stock Exchange-listed stocks, with 723 up, 740 down and 511 unchanged.
Volume on the floor of the Big Board came to 136.02 million shares, up from 114.97 million in Monday’s session.
Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 163.85 million shares.
Volume was limited by the Passover holiday, which began Tuesday, and by the upcoming Good Friday holiday this week, traders said.
Ames Department Stores was the most-active NYSE issue, dropping 7/8 to 2 3/8. The discount store operator announced that it expects to report a loss of $288 million for its fiscal 1989 and that it was negotiating a new credit agreement with its banks.
Motorola, another active NYSE issue, shot up 4 1/4 to 68 1/2. The technology company reported first-quarter profit rose 3.2%, at the high end of analysts’ expectations. It also said there are signs of renewed strength in the semiconductor industry. The news helped spark renewed buying of other high-tech stocks, including Intel, up 3/4 to 42 1/4.
Northrop, continuing its recent rebound, added 1/4 to 17.
Prices on the Tokyo Stock Exchange closed lower Tuesday amid concern that the Group of Seven major industrialized nations were not firm in their commitment to support the yen. The blue chip Nikkei average of 225 selected issues, which jumped 3.8%, or 1,119.15 points, on Monday, fell 773.25 points, or 2.5%, to 29,624.68.
In London, shares ended lower as a weaker pound added to concerns over Britain’s political and economic outlook. The Financial Times 100-share index ended 10.2 points off at 2,217.5.
CREDIT: Lukewarm Auction Sinks Bond Prices
Bond prices fell, dampened by disappointing results in the government’s auction of new long-term bonds for financing the bailout of the thrift industry.
The Treasury’s closely watched 30-year bond fell about 1/2 point, or $5 for every $1,000 in face value. Its yield rose to 8.59% from 8.55% late Monday.
Analysts said bidding at the Resolution Funding Corp.’s auction of $3.5 billion in 40-year bonds was weaker than anticipated.
The bonds sold at a yield of 8.89%, well above the average yield of 8.85% to 8.86% expected by market watchers.
Analysts said buyers of the new 40-year bonds were worried about the extra interest rate risk of the longer maturity. There also were fears that the S&L; problem is worse than anticipated and the government will have to flood the market with borrowing.
In Washington, the Resolution Trust Corp., the U.S. agency overseeing the bailout of troubled thrifts, said Tuesday that it will pay all interest on mortgage-backed bonds issued by thrifts now controlled by the government.
The statement helped calm the $20-billion market for the mortgage-backed bonds, which was rocked by fears that the government would stop paying interest on the bonds.
The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8.125%, down from 8.187% late Monday.
CURRENCY: Dollar Plunges in Erratic Trading
The dollar declined sharply against most major currencies in thin, seesaw trading as concerns about continued central bank intervention dampened market sentiment.
Gold prices also fell. On the Commodity Exchange in New York, gold bullion for current delivery settled at $375 an ounce, $1 lower than late Monday. Republic National Bank in New York quoted a late bid for gold at $375.50, off 15 cents.
In Tokyo, where global trading begins, the dollar climbed 1.70 yen to a closing 158.15 yen on Tuesday. It was quoted at 158.60 yen in London, and at 157.60 yen in New York, down from 158.335 on Monday.
COMMODITIES: Demand Propels Livestock Prices
Livestock futures traded at the Chicago Mercantile Exchange jumped to an all-time high, prodded by strong demand and tight supplies.
Meanwhile in New York, copper and cocoa continued to soar on strikes and rumors of strikes.
April cattle futures advanced 0.30 cent to 80.25 cents a pound, equal to the previous all-time high reached on April 18, 1979.
“Beef and pork are doing a lot better than most people would have expected at this time of year,” said one livestock trader about what seems to be lessening concern about the dietary pros and cons of beef and pork consumption.
