Financial Markets : STOCKS : Drug, Consumer Issues Help Dow Climb 16.58
Drug and consumer-product issues led the way as the stock market posted its second straight gain Thursday.
The Dow Jones index of 30 industrials, up 19.80 Wednesday, rose another 16.58 to 2,878.71.
In the broader market, advancing issues outnumbered declines in nationwide trading of New York Stock Exchange-listed stocks, with 911 up, 559 down and 523 unchanged.
Big Board volume slipped to 136.12 million shares from 146.62 million Wednesday.
Buyers appeared encouraged by the market’s steady showing Wednesday in the face of earnings disappointments from several large companies the past few days.
Analysts say traders are in a cautious mood as they await profit reports for the second quarter, which will begin coming in as early as next week.
But some market participants have opted to seek out stocks of companies with histories of strong earnings growth and lines of businesses that are perceived as recession-resistant.
Worries about the business outlook, meanwhile, were calmed a bit Wednesday when the government reported that the index of leading economic indicators rose 0.8% in May.
Pharmaceutical stocks, a favorite target lately of buyers seeking consistent growth, chalked up more gains. Abbott Laboratories rose 1 1/8 to 42, Bristol-Myers Squibb gained 1 1/4 to 64 1/2, Schering-Plough added 1 to 48 1/4, Glaxo Holdings rose 1/2 to 28 3/4 and Eli Lilly was up 2 3/4 to 83 3/4.
Food and other consumer-product issues, which share a reputation as “defensive” stocks, also stood out. General Mills was up 3 5/8 to 90, Pepsico 1 1/2 to 78, Gerber Products 2 1/8 to 54 7/8, Colgate-Palmolive 1 to 68 7/8 and Procter & Gamble 2 to 85 3/4.
American Telephone & Telegraph dropped 3/8 to 38 3/4 as the most active NYSE issue after a 2 1/8-point loss Wednesday, when it projected lower profit for the second quarter.
Pennzoil picked up 3 1/2 to 76 3/8. It said it planned to withdraw a registration statement covering 3.69 million shares of stock that it issued as part of an acquisition made earlier in the year.
Nike class B shares gained 4 1/4 to 77 1/2 in the over-the-counter market. The company said its quarterly earnings are expected to come in above estimates.
The Tokyo Stock Exchange’s key index retreated moderately after Wednesday’s sharp rise. The 225-issue Nikkei index fell 206.56 to 32,106.19.
Poor corporate earnings undermined London’s Stock Exchange. The Financial Times 100-share index was down 17.8 to 2,355.7.
In Frankfurt, West Germany, stocks rose in early trading but receded to profit taking. The 30-share DAX index lost 6.29 points to 1,895.17.
CREDIT Bond Prices Climb for 3rd Day in Row Bond prices finished higher for the third consecutive session as the Treasury successfully completed a new round of securities sales.
Trading was described as quiet, however, with many players reluctant to stake out sizable new positions as the end of the quarter nears Saturday.
The Treasury’s benchmark 30-year bond rose 7/16 point, or $4.38 per $1,000 face amount. The 30-year bond had risen by about $8.75 the past two sessions.
Its yield, which falls when prices rise, slipped to 8.44% from 8.48% late Wednesday.
The bond market has been rising since President Bush reversed his long-standing opposition to tax hikes on Tuesday by saying that tax-revenue increases must be part of a package to reduce the deficit.
In the tax-exempt market, the bond buyer index of 40 actively traded municipal bonds rose 1/16 point to 91 9/16. The average yield to maturity fell to 7.51% from 7.53% late Wednesday.
The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8.313%, unchanged from late Wednesday.
CURRENCY Dollar Ends Higher in Quiet Trading The dollar finished mostly higher Thursday in relatively quiet trading on world currency markets.
Traders said much of the day’s activity centered on the Japanese yen, which got a boost early in Asian trading on the expectation that another boost in Japanese interest rates was in the offing.
When activity shifted westward, traders sold the West German mark and the Swiss franc in order to buy yen, and the dollar retreated to the sidelines.
“It looked as if the yen sort of caught on,” said Curtis Perkins, a trader at Chemical New York Capital Markets Group. He said there was only marginal interest in the dollar.
Volume was relatively light on U.S. markets, said Ian Spence, chief dealer at Manufacturers Hanover Trust Co. Trading also was subdued in Europe, where dealers awaited Sunday’s economic and monetary union of East and West Germany.
Earlier in Tokyo, the dollar gained against the Japanese yen, closing at 154.42 yen, up from 154.35. Later in London, the dollar slipped to 153.20 yen. In New York the dollar settled at 153.15 yen, down from 154.40 Wednesday.
In London, one British pound cost $1.7400 late Thursday compared to $1.7445 late Wednesday. In New York one pound cost $1.7384, less expensive than Wednesday’s $1.7428.
COMMODITIES Copper Prices Spurt on Supply Worries Copper futures prices rose sharply on New York’s Commodity Exchange amid speculation of a strike at an Arizona copper mine and supply disruptions from Zambia, the world’s sixth-largest producer.
On other commodity markets, precious metals, orange juice and energy futures advanced; grains and soybeans were mixed, and livestock and meat futures were mixed.
Copper futures settled 3.1 to 5 cents higher, with the contract for delivery in July up 4.3 cents at $1.143 a pound.
Analysts said most of the buying was caused by the threat of a strike at Asarco Inc.'s Ray copper mine, which produces 115,000 tons of copper concentrate per year.
Workers have set a strike deadline of midnight Saturday and analysts saw little hope of a contract agreement before then.
Copper prices also were supported by continuing unrest in Zambia, where about two dozen people have died this week in riots sparked by the government’s abolition of food subsidies.
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