Market Edges Higher; Bond Yields Climb : Market Overview
* Stocks ended slightly higher, with buyers picking through the market selectively and companies reporting third-quarter results accounting for much of the activity.
* Treasury bond yields rose for a second straight day in light trading, following the release of slightly better-than-expected auto sales figures.
Stocks
The Dow Jones average rose 6.76 points to 3,207.64, finishing the week with a net gain of 33.23 points.
In the broader market, advancing issues outnumbered declines by about 10 to 9 on the New York Stock Exchange. Big Board volume fell to 199.06 million shares from 216.40 million Thursday.
“It’s a market that’s a bundle of conflicting emotions and tugging itself in two different directions. Because this tug of war is pretty much evenly balanced, we’re not seeing it go one way or the other,” said Thom Brown at Rutherford Brown & Catherwood.
He said the activity in stocks Friday reflected a reversal of a trend that has been in place since last week. “What you’ve seen in the last two days is the Dow catching up a little to the (broader) S&P; and NYSE (indexes). They were on an eight-session winning streak.”
Among the market highlights:
* General Motors rose 5/8 to 33 1/2 in active trading. The Wall Street Journal reported that GM directors were preparing to oust Chairman Robert Stempel, in one of several impending changes at the company.
* Goodyear Tire & Rubber gained 1 7/8 to 67 5/8. Third-quarter profits came to $1.44 a share, up from $1.01 a share in the corresponding period a year ago.
* Exxon, which posted third-quarter earnings of 90 cents a share against 88 cents a share in the like period last year, was unchanged at 62.
* Gainers among the blue chips included American Telephone & Telegraph, up 1 1/8 at 43 1/8; Minnesota Mining & Manufacturing, up 1 7/8 at 103 1/8, and Walt Disney, up 1 3/4 at 38 1/2.
* R.P. Scherer lost 1 1/8 to 31 after a secondary offering of 3.5 million shares was priced at that level.
* Nacco Industries climbed 5 5/8 to 43 7/8 as the company posted sharply higher third-quarter profits.
* Salomon Inc. dropped 3/4 to 33 on top of a 4 1/4-point slide Thursday, when the company reported that its third-quarter earnings fell to $6 million from $85 million in the corresponding period last year.
* Archive Corp., one of the most active issues in NASDAQ stock trading, jumped 3 3/4 to 10 1/2, while Conner Peripherals rose 1/4 to 18 3/4 on the Big Board. Late Thursday, Conner agreed to acquire Archive for $11.25 a share in cash.
* Sun Microsystems, another NASDAQ stock, climbed 3 3/8 to 32. The company reported sharply lower quarterly earnings late Thursday, but analysts described a bright outlook for ensuing quarters.
Overseas markets closed higher. German shares recorded their strongest close in almost a month. Frankfurt’s 30-share DAX average gained 1.1% or 16.71 points to 1,526.82, up 65.21 points in the week.
Tokyo stocks rose, due to firmer futures prices, with the 225-share Nikkei average rising 104.61 points to 17,117.65.
On the London Stock Exchange, the Financial Times 100-share average gained 11.6 points at 2,669.7, up 105.8 points for the week.
Credit
Auto makers reported a 27.1% jump in sales for the 10 days ending Oct. 20. Cars sold at a projected annual rate of 6.4 million, a vast improvement from the projected rate of 5.8 million in the first 10 days of the month.
“Although the annual selling rate didn’t come in and break any new ground, it was nevertheless a bit more vigorous than one would initially have envisioned,” said Kevin Flanagan, an economist at Dean Witter Reynolds.
Bond traders often push yields up following good economic news on the premise that a recovery would prove inflationary.
The long bond’s yield was 7.63%, up from 7.61% late Thursday.
Given Thursday’s release of surprisingly robust unemployment claims figures for the week ending Oct. 10, traders are beginning to speculate that upcoming economic data will begin to show a stronger recovery.
“There’s some slight chatter about that, but I think everybody realizes that we were in the soup to begin with,” Flanagan said.
The federal funds rate, the interest on overnight loans between banks, fell to 2.875% from 3% late Thursday.
Currency
The dollar rose against most major currencies amid a bullish market swept up in rumors about interest rates.
Traders concentrated on rumors of potential interest rate cuts by the German central bank and the reality of rising interest rates in the United States, Ryan said.
These factors made a rising dollar inevitable, Ryan said.
The dollar settled at 121.60 Japanese yen in New York trading, up from 120.725 yen. At the close in New York, the pound fetched $1.6225, down from $1.6260 late Thursday. The dollar also rose to 1.528 German marks from 1.508 marks the day before.
Commodities
Grain and soybean futures settled lower on the Chicago Board of Trade, with the weakness of wheat leading the market down.
On other markets, precious metals were mixed; copper fell; livestock and meat were mixed; coffee fell, and energy futures were mostly lower.
Elsewhere, energy futures were mostly lower on the New York Mercantile Exchange, with December light sweet crude oil 16 cents lower at $21.19 a barrel.
Gold futures were slightly higher, with October gold settling 50 cents higher at $343.60 an ounce. December silver was 1.3 cents lower at $3.782 an ounce.
Market Roundup, D6
