Dow Gain Held to 6.53 by Late Profit-Takers
Stock prices kept their weeklong rally going today, closing slightly higher despite giving up a substantial gain on a bout of late profit-taking.
The Dow Jones industrial average closed up 6.53 points at 2,682.88, bringing its gain over the last four sessions to 51.12 points. Gains outpaced losses by a 3-2 margin.
Volume on the New York Stock Exchange was a light 145.5 million shares.
Investors had brought stock prices up sharply earlier in the session but nervousness about the course of the economy caused traders to take profits in the afternoon.
In the past couple of days traders’ expectations seemed to have brightened a little as they look ahead to next week’s quarterly sale of bonds and notes by the government.
Late Wednesday the Treasury announced plans to offer a record $30.5 billion in securities over the three days of the auctions.
The prospect of that heavy load of new supply has been weighing down bond prices and pushing up long-term interest rates for some time. Now, however, analysts say those worries appear to be easing somewhat.
Before the Treasury refunding, investors will face the monthly report Friday morning from the Labor Department on the employment situation for April.
Bond prices rose this morning, strengthened by the Treasury’s announcement of the size and scope of a quarterly refunding auction next week.
The closely watched 30-year bond advanced about $2.82 for each $1,000 in face amount. Its yield, which falls when the price rises, eased to 8.98 percent from 9.01 percent late Wednesday.
The federal government said late Wednesday that it would peddle a record $30.5 billion in new debt at the May 8-10 auction, about $500 million more than the previous record set in February. There had been fears that as much as $35 billion in new notes and bonds would be sold, glutting the market and depressing the value of existing debt securities.
“The uncertainty of what would be announced has been removed,” said William Veronda, a fixed-income specialist at Financial Programs Inc., a Denver investment firm. “It was only a relatively modest increase.”
