FINANCIAL MARKETS : STOCKS : Markets Brush Off War News; Dow Loses 6.93

The financial markets yawned at news of the suspension of hostilities in the Gulf, with stock, bond and oil prices registering only minimal changes.

“The end of the war is old news,” said Hugh Johnson, chief investment officer of First Albany Corp. in New York. “The market has been in the process of discounting that since January.”

Financial markets have already turned their focus to domestic economic reports, which remain mixed, Johnson said. Consumer confidence is showing some sign of reviving, but the latest news on industrial production, inflation and other economic indicators has been bleak.

“Will the economy recover soon? I think every one of us is straining to answer that question,” Johnson said.

The highlights of Thursday’s trading:

* The Dow Jones industrial average lost 6.93, closing at 2,882.18. However, broader market indexes gained and, overall, there were twice as many advancing stocks as losers.

* Oil prices rose modestly, with the price of light, sweet crude up 30 cents to $19.16 a barrel. Traders said they expect OPEC to moderate oil supplies now that the Gulf War is coming to a close.

* Bond prices slipped, which pushed the yield of the Treasury’s bellwether 30-year bond up to 8.20% from 8.14% on Wednesday.

* The price of an ounce of gold jumped to $367.40, up $5.70, in trading on the New York Commodities Exchange.

* The dollar continued to gain against major currencies.

* Foreign stock markets were mixed. Japan’s 225-share Nikkei average rose 314.97 to close at 26,409.22. The Financial Times 100-share average rose 32.9 in London to 2,380.9. It was up as much as 40.4. In Frankfurt, the 30-share DAX index ended down 23.43 at 1,542.09.

Although many market experts believe that the U.S. economy will be boosted by the end of the war, they are not necessarily bullish on the direction of stock and bond prices.

“The theory is you buy on bad news--that was the war. You sell on good news--that’s the peace,” said Michael Sherman, chief investment strategist at Lehman Bros. in New York. “In addition, the bond market is down a few basis points. That’s because the end of the war is good for the economy, and what’s good for the economy is bad for the bond market.”

The presumption is that the economy will begin to grow again, raising inflationary pressures, which will make future interest rate cuts unlikely, Sherman added.

The bad news is that economic growth may be slow, which might damage stock prices, experts noted.

“The market came very far, very fast. It needs a strong economic recovery and strong (corporate) earnings to support it at these levels,” Johnson said. “You may be able to make the case that the economy is going to turn in the second or third quarter, but it is not going to come roaring out of the starting block. We are seeing some signs of life, but not a lot of life.”

Wall Street’s biggest gainers Thursday were auto companies.

General Motors climbed 1 5/8 to close at 39 1/2. Ford was up 2 1/8 to 32 5/8, and Chrysler rose 1 5/8 to 14 1/8.

However, technology stocks slid, with IBM down 2 1/8 to 128 3/4, Compaq off 1 7/8 to 69 1/4 and Intel down 1 1/2 to 47 3/4.

Oil stocks were mixed, with Atlantic Richfield down 2 1/8 to 129 3/4, while Chevron rose 3/4 to 75 1/4, and Mobil gained 1 to 63.

Meanwhile, the New York Stock Exchange composite index dropped 0.04 to 200.70. The Standard & Poor’s index of 500 stocks slipped 0.67 to 367.07. However, the American Stock Exchange market value index rose 3.16 to 346.13, and the NASDAQ over-the-counter index gained 2.23 to 453.05.

Volume on the New York Stock Exchange was strong, with 223.01 million shares changing hands versus 211.41 million on Wednesday.

Credit

Bond prices dropped as anxious traders fretted over the economy’s future after the Persian Gulf War ends.

The Treasury’s bellwether 30-year bond fell 3/4 point, or $7.50 per $1,000 in face amount, by late Thursday. Its yield rose to 8.20% from 8.14% late Wednesday.

Traders saw signs of economic recovery, a development that would depress bond prices, said Dan Seto, economist for Nikko Securities Co. International. A report from Chicago purchasing managers showed that they expect a slight increase in consumer activity.

However, reports that Procter & Gamble Co. is negotiating to buy Revlon Inc. boosted the price of Revlon’s junk bonds. Revlon’s 11.75% senior subordinated notes, due in 1995, rose 5 points to 88, while Revlon Group’s 13.625% subordinated notes due in 1996 jumped 5 to 73.

The federal funds rate, the interest on overnight loans between banks, rose to 7%, up from its perceived target of 6.25% late Wednesday.

Currency

The dollar advanced against other major currencies, boosted by the suspension of the allied offensive and speculation that U.S. interest rates would remain stable.

In New York, the U.S. currency ended at 1.5243 German marks, up from 1.5225 marks at Wednesday’s close. Against the Japanese yen, the dollar rose to 133.025 yen from 132.245 yen. The British pound fell to $1.9120 in New York from $1.9177 late Wednesday. In London, sterling fell to $1.9105 from $1.9155 late Wednesday.

Other late dollar rates in New York, compared to late Wednesday’s prices, included: 1.3248 Swiss francs, up from 1.3163; 5.1890 French francs, up from 5.1780; 1,139.00 Italian lire, up from 1,137.75, and 1.14975 Canadian dollars, down from 1.15145.

Commodities

Livestock and meat futures advanced strongly on the Chicago Mercantile Exchange, reflecting tighter supplies of slaughter animals.

Live cattle futures settled 0.25 to 0.87 cent higher, with the contract for delivery in April at 80.22 cents a pound; feeder cattle were 0.30 to 0.75 cent higher, with March at 90.27 cents a pound; live hogs were 0.12 cent to 1.15 cents higher, with April at 51.87 cents a pound, and frozen pork bellies were 1.45 cents to the limit 2 cents higher, with March at 64.12 cents a pound.

Precious metals, grains and energy futures also all moved higher.

Platinum advanced $9.80 to $10.10 to $405.70 an ounce on the New York Mercantile Exchange. Gold was $5.70 to $6.30 higher, with the March contract at $367.40 an ounce; and silver was 15.8 to 17.7 cents higher, with March at $3.729 an ounce, in trading on the Commodity Exchange in New York.

Light, sweet crude oil settled 4 to 30 cents higher, with the April contract at $19.16 a barrel; heating oil was 0.13 cent lower to 0.95 cent higher, with March at 65.36 cents a gallon; unleaded gasoline was 0.13 to 0.72 cent higher, with March at 67.92 cents a gallon, and natural gas was 0.9 cent to 1.4 cents higher, with April at $1.373 per 1,000 cubic feet.

Market Roundup, D6

HOW STOCKS FARED IN FEBRUARY Small stocks on the NASDAQ market and American Stock Exchange continued to surge in February, sharply outperforming bigger stocks such as the Dow 30.

Thurs. Percentage change: Stock index close Feb. Year to date NASDAQ composite 453.05 +9.4% +21.2% Amex mkt. value 346.13 +9.0% +12.3% Wilshire 5,000 3,484.85 +7.4% +12.4% NYSE composite 200.70 +7.0% +11.2% S&P; 500 367.07 +6.7% +11.2% Dow transports 1,131.17 +5.8% +24.3% Dow industrials 2,882.18 +5.3% +9.4% Dow utilities 212.78 +2.9% +1.5%