Advertisement

STOCKS : Dow Picks Up 8 in Energetic, Heavy Trading

From Times Wire Services

Stock prices pushed into record territory Wednesday for the second-straight session, fighting back waves of profit taking that hit the market earlier in the day.

The Dow Jones index of 30 industrial stocks picked up 8.07 to finish at 2,878.56, eclipsing the previous record 2,870.49 set only one day before. On Tuesday, the Dow soared nearly 50 points as technology issues led the market in a late buying surge.

In the broader market Wednesday, rising issues outnumbered losers by about 8 to 7 in nationwide trading of New York Stock Exchange-listed stocks, with 893 up, 693 down and 523 unchanged.

Big Board volume surged to 199.54 million shares, up from Tuesday’s 137.41 million.

Advertisement

The Dow took off in the morning, breaking through the 2,900 mark. But by mid-session, profit taking had cut the advance, leaving the Dow flat. The market held steady until the final minutes of trading, when it inched to a record close.

“This is a bull that’s got energy,” said Marshall Acuff, portfolio strategist at Smith Barney.

“When the market moves up like it did (Tuesday) and can do the volume it did today . . . it’s really a sign of power,” said analyst Gene Jay Seagle at Gruntal & Co.

Investors got further news of sluggish economic growth from Washington, encouraging those who believe interest rates will eventually come down.

Advertisement

The Commerce Department reported that the index of leading indicators, the government’s main barometer of future economic trends, fell 0.2% in April.

On the NYSE, Disney jumped 6 to 124 1/4 as investors keyed in on the company’s continued growth prospects. A Wertheim Schroeder analyst repeated a strong buy recommendation.

Strength in the Dow was concentrated in IBM, up 1 1/8 to 120 7/8, International Paper, up 1 to 52 1/4, and Procter & Gamble, up 2 to 82.

Among Southland stocks, Fluor rose 3/4 to 48 3/8, a new 52-week high. Some high-tech stocks weakened, including Software Toolworks, off 1 1/4 to 21 1/8. Meanwhile, L.A. Gear plunged 3 3/4 to 43 5/8 after Kidder Peabody cut its rating on the stock to hold from buy, citing the stock’s appreciation.

Advertisement

In foreign trading, stocks closed firmer in Tokyo, despite fluctuations on arbitrage trading in the morning session. The benchmark Nikkei 225-share index was up 108.59 to close 32,926.26.

In London, stocks ended sharply higher with the Financial Times 100-share index closing up 50.6 points at 2,346.2.

CREDIT Overseas Buying Helps Bond Market Bond prices advanced slightly in light trading after overseas buying perked up the market. Traders said the government’s leading indicators report had little effect.

The Treasury’s benchmark 30-year bond rose 1/4 point, or $2.50 per $1,000 face amount. Its yield, which drops when prices increase, fell to 8.59% from 8.62% Tuesday.

Advertisement

The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 7%, down from 8.188% late Tuesday.

CURRENCY Weakness in Mark Gives Dollar a Boost The dollar gained against most major currencies except the British pound, benefiting from weakness in the West German mark.

The dollar’s advance did not reflect any fundamental improvement in market sentiment toward the U.S. currency. Rather, the dollar buying chiefly was a byproduct of mark selling.

John McCarthy, chief currency dealer at the Amsterdam Rotterdam Bank in New York, said the West German currency has been under pressure due to persistent concerns about possibly negative consequences of German unification.

Advertisement

The pound got a boost from expectations that Chancellor of the Exchequer John Major soon would indicate when Britain would enter into the European Monetary System’s exchange rate accord.

The pound was quoted late in London at $1.6930, compared to $1.6953 late Tuesday. In later New York trading, a pound fetched $1.6950, compared to $1.6945 late Tuesday.

Precious metals prices moved lower.

On the Commodity Exchange in New York, an ounce of gold for current delivery lost $3.30 to close at $364.10. Republic National Bank quoted a late bid of $364.55 for an ounce of gold bullion, $2.35 lower than Tuesday.

Advertisement

COMMODITIES Sugar Futures Fall for Second Day Sugar futures prices fell for the second-straight day on New York’s Coffee, Sugar & Cocoa Exchange in reaction to a report of increased sugar production and a supply surplus.

On other markets, grains and soybeans futures were mostly lower, energy futures gained, precious metals fell, and livestock and pork futures retreated.

On Tuesday, the West German statistics firm F. O. Licht reversed its world sugar deficit estimate of 57,000 metric tons to a surplus of 694,000 metric tons.

Licht also revised production and consumption figures, placing production in the season ending Aug. 30, 1990, at 108.55 million metric tons from 107.91 million. Consumption was revised down to 107.86 million metric tons from 108.07 million.

Advertisement

Analysts said sugar futures contracts for coming months continue to trade at a premium, compared to later months, despite the report, an indication that a surplus does not exist.

Sugar settled 0.27 to 0.38 cent lower, with the contract for delivery in October at 13.70 cents a pound. On Tuesday, sugar prices fell by even larger amounts.


Advertisement