Dow Regains Ground, Rises 20.80 : Market Overview
Stock prices gained ground in a fairly busy session, rebounding from a round of selling that followed the presidential election.
* Treasury bond yields rose as the market awaited a report on October’s jobless rate and an upcoming supply of new securities.
* Soybean futures plunged sharply in trading on the Chicago Board of Trade, pushed lower by news that the United States is imposing higher tariffs on some European Community products.
Stocks
Analysts said investors were still cautiously appraising the outlook following President-elect Bill Clinton’s victory in the presidential election Tuesday.
Hopes have been rising of late that the economy has picked up momentum heading into 1993.
The Dow Jones average, down 29.44 points on Wednesday, rose 20.80 points to 3,243.84.
In the broader market, advancing issues outnumbered declines by about 6 to 5 on the New York Stock Exchange. Big Board volume came to 219.73 million, against 194.40 million on Wednesday.
The Dow transportation index rose 19.94 points to 1,380.31, and the NASDAQ index shot up 8.56 to 614.08.
“With the election out of the way, people are finally turning their attention back to the ailing economy,” said Peter McTeague, a fixed-income market strategist at Technical Data in Boston. “Friday’s employment figures have received a great deal of speculation.”
In Thursday’s activity, the Dow average would have shown a larger gain had it not been for ex-dividends, or dividend-payment adjustments, in the prices of three of its component stocks.
Among the market highlights:
* Philip Morris jumped 3 1/4 to 78 5/8 after the company said it received word that a key legal case in New Jersey on cigarette manufacturers’ liability had been voluntarily dismissed by the lead lawyer for the plaintiffs.
* Digital Equipment gained 2 1/8 to 36 5/8. At the company’s annual meeting, Chairman Robert Palmer reported plans to restructure the company into “business units.”
* American Telephone & Telegraph, up 1 5/8 to 44 3/8, and McCaw Cellular Communications, up 5 1/4 to 32 in NASDAQ activity, were heavily traded. On Wednesday afternoon, AT&T; announced plans to buy a 33% stake in McCaw.
The prospect of new competition raised by that deal sent a jolt through other telephone stocks. MCI Communications, among the NASDAQ volume leaders, fell 1 to 34 1/2.
Among the “Baby Bell” regional telephone operators, Bell South dropped 1 to 50; Nynex fell 1 7/8 to 81 1/8; Pacific Telesis declined 1 1/8 to 40 7/8; Southwestern Bell fell 1 to 65 3/4, and Bell Atlantic loss 7/8 to 46.
* Gap Inc. tumbled 2 7/8 to 30 1/4 and The Limited 1 1/8 to 23 5/8 amid what analysts described as disappointment over the latest sales figures from those specialty retailers.
* News Corp. gained 1/2 to 38, touching new highs. The company posted a sharply higher operating profit for the quarter ended Sept. 30.
Overseas, London shares ended a busy session with solid gains, with the Financial Times 100-share averages gaining 19.4 points to close at 2,711.1.
Frankfurt’s 30-share DAX average ended 8.24 points higher at 1,480.93.
Shares were modestly lower in Tokyo, with the 225-share Nikkei average losing 33.61 points to end at 17,031.59.
Credit
The yield on the Treasury’s main 30-year bond was 7.69%, up from late Wednesday’s 7.67%. The long bond’s price, which falls when yields rise, fell 5/32 point, or $1.56 per $1,000 in face amount.
The market didn’t pay much attention to a Labor Department report showing that new unemployment claims in late October fell 16,000 to 360,000, the lowest level in more than two years.
Instead, analysts said, the market was awaiting one of the key economic reports released each month, the jobless rate for the previous month. October’s figures are scheduled to be disclosed this morning by the Labor Department.
Another uncertainty that also led to light bond trading is the incoming Clinton Administration.
“You see a lot of institutions on the sidelines trying to see if Clinton’s presidency is going to be inflationary and, if so, how inflationary,” said Mark Grant, executive vice president of Rodman & Renshaw Capital Group Inc. in Chicago. Inflation is one of the prime worries of bond investors.
The federal funds rate, the interest on overnight loans between banks, remained at 2.875%.
Commodities
Soybean futures fell as the Bush Administration announced its intention to impose 200% tariffs on some European imports because of subsidies European countries provide to farmers who grow soybeans and other oil seed products. The United States will target French wine, rapeseed oil and wheat gluten.
The United States has been pushing the 12-nation European Community since 1986 to reduce its production subsidies for soybeans, rapeseed and sunflower seed.
Soybeans for delivery in November settled 8 cents lower at $5.433 a bushel.
On other markets, cocoa surged, coffee fell, precious metals were mixed, energy was higher, and livestock and meat futures were mixed.
Meanwhile, light, sweet crude oil futures gained 31 cents to close at $20.64 a barrel at the New York Mercantile Exchange on news that Algeria has called for an emergency meeting of Organization of Petroleum Exporting Countries on slumping oil prices.
On New York’s Commodity Exchange, gold was 90 cents lower at $336.20 an ounce, and silver rose 8.8 cents to $3.935 an ounce.
Currency
The dollar rose against most major currencies in a quiet day of trading.
The dollar fell against the Japanese yen to 122.85, down from 123.05 yen at Wednesday’s close. The greenback closed at 1.593 German marks, up from 1.573 marks late Wednesday.
The British pound fell to $1.537 from $1.544 the day before.
Market Roundup, D6
