STOCKS : Diverse Buying Boosts Market; Dow Up 10.64
Scattered buying in an array of industries--including oil, drugs, retailing and technology--helped Wall Street stocks end moderately higher Tuesday in a climate of uncertainty about the Persian Gulf.
The Dow Jones industrial index closed up just 10.64 points at 2,543.81, a 0.4% gain. But the NASDAQ over-the-counter composite index jumped 5.19 points to 354.05, a rise of 1.5%.
New York Stock Exchange volume was up from the anemic levels of the past two sessions--147.59 million shares traded, compared to 131.54 million Monday. And advancing issues outnumbered declining ones by about 5 to 3 on the Big Board, with 959 up, 571 down and 481 unchanged.
Analysts said investors were picking and choosing among stocks despite worry that shooting will soon begin in the Mideast.
“It’s a stock-picker’s day,” said Marshall Acuff, a portfolio strategist at Smith Barney.
“The biggest question is whether there is a war premium already built into the stock market,” said Peter Davies, vice president at Nomura Securities, pointing out that many investors expect stocks to tumble and then recover if a war breaks out.
Traders also said many investors are likely to stay out of the market until some of the economic reports due this week have been released, including third-quarter gross national product (due today) and October’s leading indicators (due Thursday).
Among the market highlights:
* Technology stocks were stellar performers, as investors searched for beaten-down bargains. Compaq jumped 3 3/8 to 53 1/2, Microsoft added 1 5/8 to 71 7/8, Teradata rose 7/8 to 9 3/8, Cadence Design soared 1 3/8 to 19 1/2 and DEC was up 2 3/4 to 50 3/4.
The biotech area also was a standout, as investors focused on the companies’ emerging profitability. Biotech shares helped propel the OTC market. Thousand Oaks-based Amgen gained 2 1/8 to 56 3/4, a new all-time high. Other winners included Genetics Institute, up 2 1/4 to 39 1/2, and Biogen, up 1 1/8 to 25 1/2.
* Oil services stocks roared as a weekly report on working drilling rigs showed the total jumped 72 to 1,175 for the week. Halliburton jumped 2 1/4 to 47 3/4, Baker Hughes gained 2 to 27 5/8 and Schlumberger leaped 2 5/8 to 57 3/4.
* Among retailers, American Stores added 2 1/2 to 48 after a strong third-quarter profit report. Other strong retailers included Dillard Department Stores, up 2 3/4 to 84 5/8; Gap, up 1 5/8 to 30 7/8, and Nordstrom, up 1 1/4 to 24 3/4.
* Insurance stocks were surprising gainers, given that a rumor emerged during the day that private Equitable Life was in financial trouble. Aetna jumped 2 1/8 to 39 7/8, Travelers was up 3/4 to 13 5/8 and AIG rose 2 to 71 3/4.
* Entertainment stocks rose as investors digested MCA’s planned sale to Matsushita. MCA inched up 5/8 to 65 3/4. Elsewhere, Disney rose 1 1/2 to 99 1/4, Paramount added 1 1/8 to 39 1/2 and New Line Cinema gained 1/2 to 7 3/8. Carolco Pictures jumped 3/4 to 6 3/8 on news that Japan’s Pioneer Electronic had acquired all rights to Carolco films to be released from now on in Japan, as part of a previously announced deal by which Pioneer acquired 10% of Carolco.
* Among Southland manufacturers, good earnings reports helped push plastics firm Cimco up 1 1/4 to 8 3/4 and electronics firm Wyle Labs up 1/2 to 11 1/4. But Sherman Oaks-based House of Fabrics was flat at 28 7/8 despite reporting healthy earnings.
* Hollywood Park Realty rose 7/8 to 34 7/8 after the board of its companion company, Hollywood Park Operating Co., recommended that both be sold. But Square D tumbled 9 1/8 to 45 3/8 after its chairman said the industrial firm, frequently rumored to be a takeover target, isn’t for sale.
In Germany, share prices ended sharply lower in thin, uncertain trading with continued pressure stemming from worries of war in the Mideast. The DAX index of 30 German shares ended 27.90 points lower at 1,415.26.
In Britain, share prices ended slightly higher on the London Stock Exchange, but well down from session peaks. The Financial Times 100-share index closed up 7.6 points at 2,159.5.
Stocks ended lower on the Tokyo Stock Exchange on a weaker yen and profit taking. The 225-share Nikkei average fell 139.35 points to 23,623.51. By midday today, the Nikkei was off another 210 points.
CREDIT Bond Prices Fall on Weakening Demand Bond prices slipped, hurt by signs of weak demand for new U.S. Treasury securities, a lower dollar and unfounded rumors of financial instability at giant Equitable Life Assurance.
The Treasury’s key 30-year issue ended down about $1 per $1,000 in face amount. Its yield inched up to 8.44% from 8.43% late Monday.
Bond market strategists said the Treasury’s regularly scheduled auction of two-year notes attracted fewer buyers than many had foreseen, which helped set a bearish tone in trading. The average yield on the notes was 7.49%.
The Equitable rumors also hurt, though generally such worries about the financial system result in a flight into Treasury securities rather than out of them.
The federal funds rate, the interest on overnight loans between banks, traded at 7.375%, down from 7.563% late Monday.
CURRENCY Pound Surges on Election News The dollar fell against most major foreign currencies as the British pound, boosted by the election of John Major as the country’s prime minister, dominated the foreign exchange markets.
The pound surged higher after Major, chancellor of the Exchequer--the British equivalent of the U.S. Treasury--was assured of becoming the next British leader.
The pound jumped to $1.977 in New York from $1.968 on Monday.
Foreign exchange traders had hoped Major would win because they were familiar with his policies and expected little change if he succeeded outgoing Prime Minister Margaret Thatcher.
The dollar also was hurt by unfounded rumors about financial trouble at Equitable Life Assurance. That shook confidence in the U.S. financial system.
The dollar closed at 1.479 German marks, down from 1.487 on Monday. It also fell to 128.35 Japanese yen, down from 128.95 at Monday’s close.
COMMODITIES Copper Futures Off as Supply Improves Copper futures fell sharply on New York’s Commodity Exchange amid signs that supply tightness is easing.
Copper settled 2.4 to 5.5 cents lower, with the contract for delivery in November at $1.12 a pound, the lowest daily settlement for spot copper since June 27.
The drop extended a decline from levels near $1.30 a pound just one month ago.
Analysts said signs of easing supply tightness in London prompted early selling interest, which in turn triggered profit taking and new selling by large speculative funds.
Elsewhere, gold and silver futures retreated on the Commodity Exchange in dull trading that reflected a lack of new developments in the Persian Gulf standoff.
Gold settled 50 to 90 cents lower, with December at $385.80 an ounce; silver was 4.9 to 5.2 cents lower, with December at $4.10.
Petroleum futures were little changed on the New York Mercantile Exchange as diplomats debated the timing of a United Nations deadline for Iraq to get out of Kuwait. Light sweet crude oil settled 9 cents lower to 25 cents higher, with January at $32.86 a barrel.
Market Roundup, D8
