2 Stocks’ Gains Help Raise Dow by 14.53 Points : <i> Highlights of Monday’s market activity, compiled from Times staff and wire reports: : </i>
* The Dow Jones industrial average rose 14.53 points to 3,269.90, but much of the gain involved sharp rises in just two stocks.
* Treasury bond yields fell amid concern about a possible government crisis in Russia.
* Flooding closed the Chicago Board of Trade and Chicago Mercantile Exchange, knocking out trading in many commodities and some stock and bond instruments.
Stocks
A late buying spree helped stocks close higher.
Advancing issues outnumbered declining ones 11 to 9 on the New York Stock Exchange.
Volume on the floor of the Big Board came to 143.12 million shares, down from 199.46 million the previous session.
Mondays have typically been the slowest day of the week for Wall Street, but the decline in volume also was attributed to the flood that shut down the Chicago Board of Trade, where financial futures and options are traded. With that market out, stock-index arbitrage trading virtually ceased.
Stocks opened on a weak note, with the Dow dipping into negative territory. Traders were unsettled over events abroad, particularly the mass resignation of Russian President Boris N. Yeltsin’s cabinet and a 3.5% drop overnight in the Tokyo Stock Exchange’s key index. The 225-share Nikkei average fell 614.01 points to 17,236.65.
But buying of blue chip issues pushed the Dow higher, and dealers turned their attention to the first smattering of first-quarter corporate earnings reports.
The blue chip buying was “risk-aversion,” said Michael Metz, a vice president at Oppenheimer & Co. “People don’t have such great convictions about the economy, and therefore they would rather stick with companies they know.”
Even so, smaller stocks didn’t fare badly Monday: The NASDAQ index of smaller stocks gained 3.91 points to 588.15.
Among the market highlights:
* Alcoa soared 5 3/4 to 73 3/4. The company, whose stock is a component of the Dow, reported better-than-expected profit in the first quarter. That sent other metals stocks higher. Kaiser Aluminum jumped 1 1/8 to 14 1/8, Amax gained 1 1/8 to 18 7/8, Phelps Dodge rose 2 1/2 to 84 1/4 and Reynolds Metals was up 2 1/8 to 58 1/8.
* Goodyear, also a Dow component, gained 2 1/4 to 70 7/8. The company predicted a favorable first quarter. And IBM rose 1 1/2 to 87 1/2 in advance of its quarterly earnings report, expected today.
* Other issues driven by earnings reports included J.P. Morgan, which fell 1 to 54 1/4 on news of lower-than-expected profit; GE, which slipped 3/4 to 75 1/4 after reporting first-quarter income of $1.23 a share versus $1.15 a year ago; and Hilton Hotels, up 2 1/8 to 49 7/8 on a surprisingly strong quarterly report.
* Among other actively traded Big Board issues, Ford, which announced that it will invest $3 billion in North American plants the next three years, rose 3/8 to 40 3/8, and Hewlett-Packard, which was recommended by an analyst, jumped 2 1/2 to 76 3/4.
* Airlines were weak on worries about new fare wars. AMR, parent of American, fell 2 3/8 to 67 1/2; UAL, parent of United, sank 3 3/4 to 127 1/2, and USAir dropped 1 1/4 to 14 5/8.
In Europe, euphoria over the ruling Conservative Party’s election victory last week continued to drive London’s market. The 100-share Financial Times index rose 18.4 points to 2,591.0.
News that Russia’s reformist government had offered its resignation depressed German shares. Frankfurt’s 30-share DAX index fell 8.33 points to 1,727.74.
Credit
Bond yields fell on concern about the government troubles in Russia, a rumor that the Federal Reserve was buying securities and belief that upcoming economic reports will be favorable.
The Treasury’s benchmark 30-year bond, whose price fell 7/32 of a point on Friday, rose 1/4 point, or $2.50 per $1,000. Its yield, which moves in the opposite direction from price, fell to 7.85% from 7.88%.
Bonds were supported by the news out of Russia, said Kevin Flanagan, a money market economist at Dean Witter Reynolds. If Yeltsin accepts his cabinet’s resignations, it could plunge Russia into a crisis.
News of international uncertainty often supports Treasury bond prices because the U.S. securities are considered a safe haven.
Bonds were also boosted by a report that the Federal Reserve was buying Treasury securities for a customer account, Flanagan said. The central bank does not comment on its market activities.
The economist said a further stimulus was a belief that government reports this week will show economic weakness, which tends to boost bond prices since it makes it more likely that the Fed will lower interest rates.
Among the reports are March retail sales and 10-day auto sales due today, industrial production Wednesday and merchandise trade figures Thursday.
The federal funds rate was 3 5/8%, up from 3 3/8% Friday.
Currency
The reports that the Russian cabinet had offered to resign also sent the dollar up.
In the wake of the Russian developments, traders also sold German marks. “Any unsettled situation over there immediately upsets holders of mark assets,” said Robert Hatcher, a currency dealer for Barclay’s Bank PLC.
The dollar closed at 1.6530 German marks, up from 1.6360 Friday. It fetched 133.00 yen, up from 132.85. The British pound fell to $1.7625 from $1.7660.
Commodities
The shutdown of the two Chicago exchanges, which had a huge impact on commodities trading nationwide, resulted from a river retaining wall rupturing.
The breach sent water cascading into a turn-of-the-century tunnel system beneath the business district. Flooding on lower floors caused power in much of the downtown to go out.
Much of the trading in agricultural products--grains and livestock, for example--is in Chicago, so action in those commodities was limited.
On the New York Mercantile Exchange, contracts for May delivery of light sweet crude settled at $20.22 a barrel, down 22 cents from Friday.
Gold prices fell $1.90 to $339.20 an ounce on the New York Commodity Exchange. Silver slipped 1.5 cents to $4.085.
Market Roundup, D10
