Traders Cautious, but Dow Gains 12.97 : Market Overview
* The stock market pieced together a small gain as traders kept a cautious eye on the dollar, which ended mixed.
* The yen soared after Japan released details of a program to boost its economy.
* Bonds were mostly lower in quiet trading. The yield on the Treasury’s main 30-year bond, which rises when prices fall, edged up to 7.42% from 7.39% Thursday.
Stocks
The Dow Jones average rose 12.97 points to 3,267.61, finishing the week with a gain of 13.51 points.
Advancing issues outnumbered declines 5 to 4 on the New York Stock Exchange. Big Board volume slipped to 152.23 million shares from 178.49 million the day before.
Analysts said stock traders appeared reluctant to make big commitments until they are sure that a dollar crisis has been averted.
One plus on the international scene was a continued rally in the Japanese stock market, which reacted to the government plan to stimulate the economy.
Tokyo’s 225-share Nikkei average jumped 415.79 points--or 2.37%--to 17,970.79. It ended last Friday at 16,216.88, giving it a rise of 1,753.91, or 10.8%, for the week.
In London, the Financial Times 100-share average rose 1 point to 2,312.6, but finished the week 43.1 points below the previous week’s close.
Frankfurt’s 30-share DAX average rose 3.05 points to 1,516.47, but was 3.55 below the previous Friday’s close.
Among market highlights:
* Blue chip gainers included Philip Morris, up 1/2 at 81 3/4; Coca-Cola, up 1/2 at 43 3/8; American Telephone & Telegraph, up 1/8 at 42 1/4, and Aluminum Co. of America, up 1 3/4 at 66 1/4.
* Energy stocks were among the day’s most notable gainers, benefiting from rising oil prices. Exxon rose 1/2 to 64 1/8, Texaco 1 1/8 to 65 3/8, Chevron 1 to 72 3/4, Mobil 1 to 65 1/4 and Amoco 3/4 to 51 1/8.
* In oil field service, equipment and drilling, Halliburton climbed 2 3/4 to 35 1/2, Baker Hughes added 1 5/8 to 25 1/8, and Schlumberger gained 7/8 to 68 1/2.
* Auto stocks, which have been under pressure from worries about the progress of economic recovery, lost more ground. General Motors dropped 1/4 to 33 1/2, Ford Motor dipped 5/8 to 39 3/4, and Chrysler fell 3/8 to 19 1/8.
Currency
Investors were encouraged by the $86.3-billion-plus plan to ramp up Japan’s economy through increased public works and investment, said Paul Stancs, a trader at Dai-Ichi Kangyo Bank Ltd. in New York.
“It really gave the yen a boost that it sustained throughout the session,” Stancs said.
Heavy selling of German marks for yen helped the dollar against the mark but the mark-yen cross trading aggravated the U.S. currency’s decline against the yen, traders said.
The dollar fell to 123.05 yen from 124.75 Thursday. It edged upward to 1.409 marks from 1.4085. The British pound rose to $1.983 from $1.980.
Credit
Some traders sold bonds on renewed dollar worries.
A weak dollar hurts the bond market because it makes it unlikely that the Federal Reserve will further lower interest rates, which increases the value of fixed-income securities such as bonds.
Selling also followed a rise in bond prices Thursday, indicating that traders were capturing profits at the higher levels.
The price of the 30-year bond fell 11/32 point, or $3.44 cents per $1,000 in face amount.
The federal funds rate, the interest on overnight loans between banks, was 3.313%, down from 3.375% Thursday.
Commodities
Cotton futures fell sharply on New York’s Cotton Exchange as the market discounted reports of considerable damage done to the Louisiana crop by Hurricane Andrew.
Cotton for October delivery settled 1.49 cents lower at 57.29 cents a pound--a new contract low.
On other markets, grain and soybeans fell, livestock and pork were mixed, energy gained and precious metals were mixed.
The strength of gasoline futures gave a lift to crude oil in trading on the New York Mercantile Exchange. October light sweet crude rose 18 cents to $21.31 a barrel.
Silver futures continued their slide on New York’s Commodity Exchange, with September 3.1 cents lower at $3.674 an ounce. September gold settled 70 cents lower at $339.90 an ounce.
