STOCKS : Stocks Stage Technical Gain; Dow Rises 21.92
Stock prices posted their first clear-cut gain of the week Thursday in what analysts described as a technical rebound from the market’s recent drop.
The Dow Jones industrial average added 21.92 points or 0.8% to 2,934.93, as rising stocks topped losers 949 to 591 on the New York Stock Exchange.
Big Board volume totaled 155.84 million shares at 4 p.m. EDT, against 186.83 million at the same point Wednesday. In after-hours trading, an additional 7.24 million changed hands.
Analysts said the market’s decline earlier this week to its lowest levels since late May had attracted some buyers looking for bargains.
In addition, money managers at large institutions seemed to be making selective additions to their portfolios before they make midyear reports to clients. The first half of 1991 ends today.
With one session remaining in the first half, the Dow shows a gain of 301.27 points, or 11.4%, from Dec. 31.
Among the market highlights:
* Allied-Signal gave the Dow a big boost, jumping 3 7/8 to 33 1/4 as the most active NYSE issue. The company named Lawrence Bossidy, vice chairman of GE, its chief executive. The Dow also was pulled up by McDonald’s, up 1 5/8 to 33 3/8 after a Bear Stearns analyst reiterated a buy rating.
* Health-care stocks came back to life after a recent drubbing. Tokos Medical gained 1 1/4 to 26, Upjohn rose 1 5/8 to 43 5/8, Warner Lambert added 2 to 73 3/4, and TriCare leaped 1 3/8 to 13 3/4. Santa Ana-based TriCare was helped by a sharply higher earnings report. Also, Amgen soared 7 to 117 3/4 after an Alex Brown analyst repeated a strong buy rating and raised earnings estimates.
* AMP rose 2 1/8 to 50 1/2 after the electronics firm projected only a slight drop in second-quarter earnings. Many other tech stocks fell, however. Compaq lost 1 1/2 to 30 after Kidder Peabody cut earnings estimates for the troubled firm. Motorola fell 1 7/8 to 65 7/8 and Apple gave up 1/2 to 42 1/2.
* Among Southland stocks up on bargain-hunting, Fluor rose 2 to 47 5/8, American Ecology added 1 to 13 1/4 and Unocal gained 1 1/2 to 23 1/4.
Overseas, Tokyo stocks continued to reel from the scandal involving Japan’s major brokerages. The 225-stock Nikkei average fell 223.35 points, or 0.9%, to 23,543.03.
German shares also dropped, with the 30-share DAX index closing off 6.05 points at 1,666.09. But in London, the 100-share Financial Times index rose 15.2 points, or 0.6%, to 2,452.5.
Credit
Bond prices advanced moderately in thin trading as investors stepped up to buy before the quarter’s end today. Fears of higher interest rates from a strengthening economy seemed to fade at least for the moment.
The Treasury’s 30-year bond rose 1/4 point, or about $2.50 per $1,000. Its yield slipped to 8.48% from Wednesday’s 8.51%.
The federal funds rate, the interest on overnight loans between banks, was quoted at 5 3/4%, up from 5 3/8% late Wednesday.
Currency
The dollar finished higher against all major currencies except the Japanese yen.
Despite the gains, many investors were disappointed that the currency didn’t put in an even stronger showing given a slew of data that underscored the economy’s emergence from recession.
The government said consumer spending surged 1.1% in May.
Many investors were motivated to buy the dollar because of the unrest in Yugoslavia--on the theory that the currency is a safe haven in times of world turmoil.
The dollar settled at 137.80 yen in New York, down from 138.28 Wednesday. But it rose to 1.795 German marks from 1.787.
Commodities
Oil prices posted big gains, largely on news of a refinery fire in the Caribbean.
Light sweet crude oil for delivery in August settled at $20.48 per barrel, up 40 cents, on the New York Mercantile Exchange.
The market moved up sharply in the afternoon on news of a fire at the Amerada Hess refinery in St. Croix, Virgin Islands, which was damaged nearly two years ago by Hurricane Hugo.
“All hell broke loose,” said Stephanie Rzasa Schiff, an oil broker at Dean Witter Reynolds. “The gasoline (futures) started to scream, and the heating oil started to rally and crude started to work its way up.”
Subsequent reports indicated that the fire had not been particularly bad, and prices backed off.
Elsewhere, corn and other grain futures plunged after National Weather Service and private forecasters predicted that temperatures in the Corn Belt will be hot and dry through the weekend, with a cooling period next week.
Corn enters a critical growing period around July 1 in most areas, with cooler temperatures and rain needed to help kernels develop. Soybeans also are in need of water but are more resilient than corn.
Farmers expect record crops this year if weather remains moderate. Wholesale prices would fall if that should occur.
At the close, wheat futures were 6 3/4 cents lower to unchanged, with the contract for delivery in July at $2.66 1/4 a bushel; corn was 5 3/4 to 3 cents lower, with July at $2.31 1/2 a bushel; and soybeans were 11 1/2 to 7 1/2 cents lower, with July at $5.49.
Gold settled on New York’s Comex at $365.80 an ounce, unchanged from Wednesday. Silver closed at $4.39, up from $4.36.
