Individuals Fueled Stocks’ Rally--Study

Increased trading by individual investors paced one of Wall Street’s best quarters ever, an industry report Wednesday showed.

The Securities Industry Assn. said among the quarter’s highlights were a record 29% increase in the NASDAQ composite index of over-the-counter stocks and the Dow Jones industrial average’s best gain in four years.

In a quarterly report titled “Weee’re Baaaack!” the trade group said New York Stock Exchange trading volume averaged 195 million shares per day, the second-highest behind the 1987 fourth quarter of 213 million shares. Volume was up 22% over the same period a year ago.

“This is an important turnabout for both the industry and the securities markets,” said Jeffrey Schaefer, the SIA’s research director. “The markets have been almost dead since the fourth quarter of ’87.”

Retail investors accounted for 42% of the increase in trading activity, institutional investors took up 34% and the rest came from trading by securities firms for themselves.

Activity by the retail sector averaged 125.7 million shares daily during the first three months of the year, nearly one-third more than a year earlier, the SIA report showed.

“Keeping things in perspective, it’s a good increase, but we’re coming off practically three depressed years compared to 1987,” Schaefer said.

Individual investors hibernated and the securities industry went into a tailspin after the October, 1987, stock market crash.