Dow Off 2.01 as Investors Await Report on Jobs : Market Overview
* Wall Street ended on a mixed note, with blue chip stocks slipping but other issues hitting record highs for the third day running.
The Dow Jones industrial average, down 15.21 points Wednesday, slipped another 2.01 to 3,255.59.
* Treasury bond yields inched up as traders positioned themselves for the release today of January’s employment data.
Stocks
Stock prices wavered all day as traders looked ahead to today’s employment report.
Economists expect that the January jobless rate will be unchanged at 7.1% and that the economy will have generated a small rise in jobs outside the farm sector.
Wall Street wants to see an economic recovery--but a slow one that doesn’t threaten to send interest rates sharply higher.
Thursday’s action in the market suggested that most investors believe that they’re going to get the recovery they want. Despite the Dow’s loss, advancing issues outnumbered declines by 7 to 6 on the New York Stock Exchange.
Big Board volume eased to 242.05 million shares from Wednesday’s 262.44 million.
Meanwhile, the leading gauge of small-stock activity, the NASDAQ composite index, hit a record for the third straight day, gaining 0.70 points to 637.67.
Among the market highlights:
* Retailers led the broad market higher after some chains posted better-than-expected January sales gains. Sears rose 1 1/2 to 43 7/8, J. C. Penney added 2 1/2 to 59 7/8, Value Merchants jumped 2 3/8 to 35 5/8, Kmart was up 1 7/8 to 52 3/4, and Pic ‘N’ Save zoomed 1 1/2 to 22.
* Some drug issues came under pressure as details about President Bush’s proposed health care cost-containment plan became known. Merck lost 2 1/8 to 156, Schering-Plough lost 1 1/4 to 61 5/8, and Pfizer dropped 1 5/8 to 72.
Health maintenance organizations were viewed as winners, however. U.S. Healthcare rose 7/8 to 54 1/8, Pacificare gained 1 3/4 to 52 3/4, and Sierra Health rose 7/8 to 26 3/4.
* Among industrial issues, insulation maker Owens-Corning rocketed 7 5/8 to 36 1/2 as investors reacted positively to news that the company is taking a one-time charge of $800 million to cover any liability for asbestos claims.
Elsewhere in the industrial group--newly popular with many investors betting on an economic recovery--Kimberly-Clark rose 1 to 50 7/8, Cooper Tire added 1 to 48 3/8, Dow Chemical gained 1 1/2 to 56 1/2, and Ford rose 1/2 to 34. Also, Conrail jumped 2 1/8 to 85 7/8 after PaineWebber reiterated a buy .
* Banks and S&Ls; showed continuing strength on hopes for a recovery. Great Western added 5/8 to 19, Imperial Bancorp gained 7/8 to 14, Citicorp added 1 to 16 7/8, and First Interstate was up 1 1/2 to 37 5/8.
* TelMex, the Mexican phone company, rose 1 1/2 to 51 on the NYSE. In Mexico City, the market hit a new high on Thursday.
* Stone Container slumped 2 1/8 to 28 3/4 after it reported disappointing fourth-quarter results. Prudential Securities lowered its 1992 earnings estimate on the paperboard and packaging company.
* Oxnard-based Benton Oil added 1/8 to 8 7/8. The cash-strapped company said it sold its Colorado properties, raising $775,000.
Overseas, Tokyo stocks closed higher. The Nikkei average rose 168.55 points to 22,104.92.
Shares slid in London as big investors remained reluctant to buy. The Financial Times 100-share average lost 12.8 points to 2,534.3. In Frankfurt, the DAX average slid 5.49 points to 1,681.13.
Credit
The price of the Treasury’s benchmark 30-year bond lost 13/32 point, or $4.06 per $1,000. Its yield, which moves in the opposite direction from price, rose to 7.76% from 7.73% Wednesday.
Bond traders typically don’t want to hold a lot of securities ahead of the release of an economic report that can have major market consequences.
Traders also sold securities late in the day to cash in on profits they made after bond yields fell early in the morning, following release of a report showing a big drop in factory orders in December, said Kathleen Camilli, economist at Maria Ramirez Capital Consultants.
Bond traders hope that further signs of economic weakness will prompt the Federal Reserve to cut interest rates again.
The federal funds rate, the interest on overnight loans between banks, remained at 4%.
Currency
The dollar settled mostly lower on light volume as traders assessed the outlook for interest rates.
Among the factors that depressed the greenback were comments by the president of Germany’s Bundesbank, Helmut Schlesinger, defending the relatively strong mark. He said his country’s monetary policy will not be loosened.
In addition, White House Economic Adviser Michael J. Boskin told Congress that the Federal Reserve has room to lower interest rates to stimulate the economy without stirring inflation. Lower U.S. rates would make the dollar less attractive.
The dollar fell in New York to 1.577 German marks from Wednesday’s 1.590. But it rose to 125.65 Japanese yen from 125.56.
Commodities
Platinum prices advanced strongly on reports of supply problems in South Africa and Russia, the world’s main producers.
The April contract rose $5.60 to $368 an ounce, bringing the gain for the week to nearly $20 on the New York Merc.
Meanwhile, on New York’s Comex, gold for February rose 10 cents to $355.70 an ounce. February silver was 2.1 cents higher at $4.21.
Light, sweet crude oil for March delivery was unchanged at $19.50 a barrel on the New York Merc.
