Dow Rises 14.04 on Anniversary of the Market Crash of 1987 : Market Overview
Wall Street avoided the ghosts of the 5-year-old Oct. 19 stock market crash and ended slightly higher by keeping a focus on earnings. The Dow Jones average rose 14.04 points to 3,188.45.
* Treasury bond prices continued to wilt. Analysts said there was concern that Bill Clinton will become President and increase government spending. The 30-year bond’s yield, which rises when prices fall, was 7.57%, up from 7.52% Friday.
* The dollar settled mostly higher, putting in its best performance against the British pound.
Stocks
Traders said the anniversary of the 1987 market crash, stocks’ worst one-day decline ever, was a relatively tame event.
The Dow Jones industrial average fell 508 points, or more than 22%, on Black Monday, Oct. 19, 1987.
The anniversary included recollections of that debacle and appraisals of subsequent efforts to modernize and strengthen the mechanism of the market.
Stock prices spent most of Monday’s session in a narrow range.
The broader market outperformed the Dow, with advancing issues outnumbering declines 3 to 2 on the New York Stock Exchange. Big Board volume came to 222.15 million shares, against 235.92 million Friday.
The NASDAQ index soared 8.06 points to 590.67, led by gains in the technology sector.
Investors focused on earnings and on politics ahead of the third and final presidential debate Monday night.
“Whatever buying that has been done was selective,” said Alice Sadlo, a first vice president at McDonald & Co. “The market is hanging in here fairly well. The fifth-year anniversary had some people spooked just because of the date. There’s been a lot of press on it.”
Among the market highlights:
* Blockbuster Entertainment rose 5/8 to 14 1/2 in active trading. The video-store operator said it will acquire Music Plus and Sound Warehouse for $185 million. The company also reported third-quarter earnings of 22 cents a share, up from 16 cents in the period last year.
* U.S. Surgical, which reported strong quarterly earnings Friday, jumped 3 5/8 to 69 7/8.
* Among blue chips that ran into heavy selling pressure last week on earnings disappointments, International Business Machines slumped another 2 1/4 to 68 1/2, and Philip Morris was down 5/8 to 76 5/8.
* But Westinghouse Electric, which took issue with what it called “unfounded speculation” about its financial status, rose 3/4 to 12 1/2.
* Other gainers among the Dow Jones industrials included Merck, up 1 3/4 to 44 1/4; Coca-Cola, up 3/4 to 41 1/8; Procter & Gamble, up 1 to 51 5/8 trading ex-dividend, and J. P. Morgan, up 1 to 63 3/8.
* Progressive jumped 8 7/8 to 75 5/8. On Friday, the company reported third-quarter earnings of $2.09 a share, up from 41 cents in the corresponding period a year earlier.
* Among technology issues that led the NASDAQ market higher, Intel gained 2 5/8 to 65 7/8, Microsoft 2 1/2 to 87 7/8, Novell 1 1/8 to 30 3/4, Oracle Systems 1 1/2 to 22 1/8 and DSC 1 1/4 to 14 7/8.
Overseas, share prices fell sharply in Tokyo. The 225-share Nikkei average slumped 466 points, or 2.68%, to 16,903.81, ending below 17,000 for the first time since Aug. 26.
Frankfurt’s 30-share DAX average rose to its highest level in two weeks, gaining 17.46 points to 1,479.07.
Prices dipped in London. The 100-share Financial Times index lost 1.7 points to 2,562.2.
Credit
There was little economic data to move the bond market, and thus it followed Friday’s lead in falling.
Analysts said traders had time to contemplate Clinton’s promises to increase government spending, an action the market feared could increase the federal deficit.
The price of the 30-year bond, which fell 3/16 point Friday, was off 9/16 point, or about $5.63 per $1,000 in face amount.
The federal funds rate, the interest on overnight loans between banks, rose to 3.063% from 2.875% Friday.
Currency
Traders said the dollar remained in tight ranges before drifting higher late in the session.
Most of its gains were attributed to problems with other currencies rather than any fundamental strength of its own.
The pound was in the spotlight, falling sharply amid worries over British economic problems and perceptions of lack of government leadership.
In New York, the pound fell to $1.623 from Friday’s $1.650.
The dollar rose to 120.45 Japanese yen from 119.50. It also rose to 1.499 German marks from 1.480.
Commodities
Metal futures traded in a narrow range as the economy continued to exert pressure on prices.
On other markets, grain and soybeans futures were higher; cattle and pork futures advanced, and energy futures were mostly lower.
Gold futures held firm despite the strengthening of the dollar against other currencies.
Gold futures for October delivery settled 30 cents higher to $342.70 an ounce on New York’s Commodity Exchange. October silver was 1.2 cents higher at $371.8 an ounce.
Meanwhile, November light, sweet crude oil was 14 cents lower at $22.14 a barrel on the New York Mercantile Exchange.
