FINANCIAL MARKETS : STOCKS : Late Computer Trades Carry Dow Over 2,900
Blue-chip stocks sprang into the plus column Thursday, with the Dow Jones industrials edging back through the 2,900 level, spurred by a late burst of buying by computer-guided traders and a firm bond market.
The Dow Jones index of 30 industrials, down about 15 at mid-session, finished with a plus-6.43 reading at 2,901.73.
In the broader market, advancing issues outnumbered declines in nationwide trading of New York Stock Exchange-listed stocks, with 774 up, 696 down and 539 unchanged. Big Board volume totaled 138.57 million shares, against Wednesday’s 137.42 million.
Analysts said buying interest improved after the Dow edged into the plus side and over 2,900, which has been a resistance point.
Stocks had fallen earlier in the day after Federal Reserve Chairman Alan Greenspan said he does not see a U.S. credit squeeze, which heightened pessimism about immediate cuts in interest rates.
Analysts said the upward revision in first-quarter U.S. gross national product also added to the conviction that the Fed won’t trim interest rates. GNP was revised to a gain of 1.9% at an annual rate from 1.3% in the original estimate.
Still, investors who have been waiting to get into stocks managed to outnumber the interest rate pessimists.
Gainers among the blue chips included Philip Morris, up 7/8 at 44 3/8; Westinghouse, up 7/8 to 37 3/8, and IBM, up 1 1/8 to 119 1/8.
Johnson & Johnson rose 2 to 66 5/8. The FDA approved a J & J drug for treating colon cancer.
VF Corp. fell 2 1/4 to 25. The firm projected a 47% decline in second-quarter earnings, citing “sales shortfalls” in its Jantzen sportswear and casual clothing operation and weak orders for jeans wear.
McDonnell Douglas plunged 3 3/4 to 35 3/4, continuing to slide on worries about the company’s financial health.
Smaller stocks continued to be strong. The NASDAQ over-the-counter industrial index rose 1.71 to 495.18. OTC gainers included Apple Computer, up 1 7/8 to 41 7/8, Mentor Graphic, up 1 1/8 to 22 3/8, and Amgen, up 1 to 76 1/2.
Some very small Southland stocks also advanced, suggesting that more individual investors are entering the market. Bridgford Foods rose 1 to 21, Barry’s Jewelers gained 1 to 7 and Birtcher Corp. rose 1/2 to 5 1/4.
But Software Toolworks continued its decline, falling 1 1/2 to 18 7/8. The company’s outlook was hit in a recent Barron’s article.
Avery International lost 1/2 to 24, despite a company announcement that its second-half results should be stronger than first-half results.
In Tokyo, stocks closed almost unchanged. The Nikkei average lost a mere 0.49 points to 32,087.27. In London, shares closed a shade lower. The Financial Times 100-share index ended down 0.9 points at 2,370.3.
In Frankfurt, however, a buying spree continued for a third day. The 30-share DAX index ended up 14.02 points at 1,863.55. The two Germanys on Thursday formally agreed to unification.
CURRENCY German Unification Vote Bolsters Mark The dollar was mixed against other major currencies, gaining against the yen but falling against the West German mark.
Dealers said the mark advanced on news that East German lawmakers overwhelmingly had approved a historic economic merger with West Germany, the most difficult step toward unifying the two nations.
The dollar gained against the British pound after sterling rose overseas. In London, the pound rose to $1.7255 from $1.7225 late Wednesday. In New York, the pound was quoted at $1.7200, down from $1.7220 late Wednesday.
Gold advanced domestically and overseas. At Republic National Bank in New York, gold bullion rose 30 cents an ounce to $349.90.
CREDIT Bond Buyers Return as Yields Advance Government bond prices rose as buying interest picked up after a four-day slump.
The Treasury’s benchmark 30-year bond, which lost 13/32 point Wednesday, rose 5/16 point, or about $3.13 per $1,000 face amount. Its yield fell to 8.49% from 8.51% late Wednesday.
Gib Clark, chief trader for Daiwa Securities Inc., said buying interest grew after the yield on most Treasury securities exceeded 8.50% as prices fell during the slump.
Traders said there also was evidence that prices were boosted when market participants bought bonds to cover short positions in borrowed securities.
The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8.188%, down from 8.25% late Wednesday.
COMMODITIES Cocoa Prices Slide; Energy Futures Rise Prices of cocoa futures fell sharply on New York’s Coffee, Sugar & Cocoa Exchange.
On other markets, grains and soybean futures were mixed; livestock and meat prices were mostly lower; precious metals declined slightly, and energy futures were mostly higher.
Cocoa settled $46 to $62 lower, with the contract for delivery in July at $1,185 a ton.
Tables begin on D6.
