Dow Up 14.85 on Listless Trading Day
Stock prices closed with moderate gains today, but traders said there were few new factors in the market, and prices appeared to be stuck in a narrow range.
The Dow Jones industrial average closed 14.85 higher at 2,628.22. In the broader market, advancing stocks outpaced decliners by a 5-3 margin.
Volume on the New York Stock Exchange was a light 120.61 million shares, against 92.94 in the previous session.
Traders appeared to find little cause in the economic and financial news to make many big changes in their positions.
Oil prices were moderately higher today as they continued to respond to events in the month-old showdown in the Middle East. But interest rates declined a bit in the credit markets.
Analysts said stock-market investors were awaiting Friday’s monthly report from the Labor Department on the employment situation.
The data are expected to add a new factor to the Federal Reserve’s equations as it calculates the next step in its monetary policy.
Bond prices were little changed at midday today, giving up early gains after another fiery speech by Iraqi President Saddam Hussein.
The Treasury’s benchmark 30-year bond, which fell 5/16 point or $3.13 on Tuesday, was unchanged at midday. Its yield held steady at 9.01%.
Bond prices had been posting gains in moderate trading before the speech. But reports of Saddam Hussein’s remarks sparked temporary “panic selling” in the credit markets, said Jay Goldinger, an economist at Capital Insight Inc. in Beverly Hills. He said the Iraqi’s “every other word suggests war.”
Crude oil futures prices also moved higher. Elevated oil prices can portend higher inflation, which erodes the value of fixed-income securities.
Goldinger said activity picked up markedly shortly after the speech by Saddam, who reiterated a call for holy war and said Iraq will not bow to the international trade embargo even though Iraqi babies are dying because of U.N. economic sanctions. Saddam also said U.S. forces will not frighten the Persian Gulf nation.
“Everyone is afraid he’s about to start a war,” Goldinger said. But bond prices recovered once the market digested Saddam’s comments and by midday were virtually unchanged.
In the secondary market for Treasury bonds, prices of short-term governments were unchanged to 1/32 point higher, intermediate maturities were unchanged to 1/16 point higher, and long-term issues were unchanged, according to Telerate Inc., a financial information service.
The Shearson Lehman Brothers daily Treasury bond index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, rose 1.60 to 1,143.22.
