Preholiday Surprise Dow Climbs by 22.07

The stock market rallied in quiet preholiday trading today, pulling out of its recent holding pattern.

Analysts said traders came into the session with low expectations, given the market’s recent sluggish behavior and the approach of a long holiday weekend. The markets will be closed for Good Friday.

In that kind of environment, observers said, an absence of selling pressure helped produce some pleasant surprises in the price fluctuations of individual stocks.

The Dow Jones average of 30 industrials climbed 22.07 to 2,751.80.

Advancing issues outnumbered declines by about 8 to 5 on the New York Stock Exchange, with 891 up, 560 down and 534 unchanged.

Big Board volume totaled 142.47 million shares, against 141.08 million in the previous session.

The NYSE’s composite index rose 1.23 to 188.80.

The government reported that retail sales dropped .06% in March, in contrast to advance estimates of a small increase.

That served as a new suggestion of sluggish, erratic economic growth, along with possibly less upward pressure on interest rates than has been feared of late.

Bond prices drifted lower in early trading today after oil prices gyrated and the government issued revised figures for February’s retail sales.

The Treasury’s benchmark 30-year bond fell 7/32 point, or about $2.19 per $1,000 face amount, while its yield, which rises when prices fall, rose to 8.59% from 8.57% late Wednesday.

Traders said the government’s retail sales report initially boosted Treasury prices because the March sales figure was weaker than expected. An indication of economic sluggishness boosts bonds because it implies the Federal Reserve may act to ease interest rates.

But news that the government revised the February retail sales figure upward, from an 0.8% decline to an 0.3% decline, caused bond prices to give up their gains.

Crude oil futures prices initially jumped today, further deflating bond prices, but then lost their gains. Higher oil prices can feed inflation, which erodes the value of fixed-return investments such as bonds.

Traders also fear that the Federal Reserve will be less likely to nudge interest rates lower when inflation accelerates.

In the secondary market for Treasury bonds, prices of short-term governments were unchanged to 1/32 point lower, intermediate maturities fell 5/32 point and long-term issues were down from 7/32 point to 9/32 point.