Holiday Sales Outlook Sends Dow Up 22.96
Market Overview
Highlights of Monday’s market activity, compiled from Times staff and wire reports:
* The stock market chalked up another solid gain, extending its Thanksgiving week rally amid increasing optimism over the progress of economic recovery.
* Crude oil futures prices sank to a 7 1/2-month low on the New York Mercantile Exchange amid perceptions that OPEC’s agreement to trim production won’t be enough to shore up sagging prices.
* Treasury bond yields remained stable and prices ended the day mixed, recovering somewhat from earlier losses that were prompted by concern that the economy may be growing too quickly.
Stocks
The Dow Jones average of 30 industrials, up 54.84 points last week, rose another 22.96 to close at 3,305.16.
That marked the average’s first close above 3,300 since it stood at 3,320.83 on Sept. 21.
Although the Dow remains below the record high of 3,413.21 it set on June 1, several broader market measures have been steadily reaching new peaks over the last several days.
In the broader market, advancing issues outnumbered decliners by about 5 to 3 in the daily tally on the New York Stock Exchange. Big Board volume came to an estimated 237.62 million shares, against 106.02 million in Friday’s abbreviated session.
Among the market highlights:
* Gainers among retailing stocks included Wal-Mart Stores, up 3/8 to 64 3/8; Gap Inc., up 1 to 37 3/4; The Limited, up 3/4 to 27; Dillard Department Stores, up 1 to 50 3/8; Walgreen, up 1/2 to 44 1/8; Dayton Hudson, up 1 3/4 to 78 3/4, and Neiman-Marcus Group, up 1 3/8 to 19.
* International Business Machines rose 2 1/4 to 68 1/4 amid conjecture by some analysts that the worst might be over for the battered stock, recently at its lowest level in a decade.
* Among other industrials closely linked to the ups and downs of the business cycle, International Paper rose 5/8 to 65 1/4; Aluminum Co. of America gained 1 1/8 to 69 3/4; DuPont rose 1/2 to 48 1/8, and General Motors added 5/8 to 32 1/4.
* By contrast, big-name growth stocks, which often thrive in periods of sluggish economic performance, made little headway. Merck dropped 5/8 to 45 1/8; Coca-Cola lost 5/8 to 39 3/4, and Bristol-Myers Squibb was down 1/2 to 67 1/8.
* Syntex, which fell 2 3/8 last week on a downbeat earnings report, lost another 5/8 to 22 1/8 in active trading, touching three-year lows.
* Gainers among technology issues traded in the NASDAQ secondary market included Apple Computer, up 1 to 57 1/2; Intel, up 1/2 to 71 1/2; Seagate Technology, up 1/2 to 19, and Sun Microsystems, up 1/2 to 31 3/4.
Commodities
Gasoline and heating oil futures ended lower in a see-saw session in which sellers ultimately prevailed.
On other commodity markets, coffee futures rose sharply; platinum led precious metals higher; livestock and meat futures were mixed, and grains and soybeans were mixed.
Light, sweet crude oil for January delivery fell 38 cents to $19.89 a barrel, the lowest price for near-term delivery and the first settlement below $20 since last April.
Monday was the first trading day in New York since the Organization of Petroleum Exporting Countries reached agreement Friday to cut their output from 25.3 million barrels a day to 24.9 million in the first quarter of 1993.
Crude prices initially rose, reaching a high of $20.41. But the market collapsed in the final hour as traders focused on the cartel’s inability to overcome self-interest among some of its members.
Meanwhile, on New York’s Commodity Exchange, gold rose 30 cents to $334.30 an ounce, and December silver rose 1.6 cents to $3.731 an ounce.
Credit
The price of the Treasury’s main 30-year bond was unchanged from Friday; its yield also remained the same at 7.59%.
Bond trading was thin, and prices swung up and down in a narrow range, said William V. Sullivan, director of money market research at Dean Witter Reynolds Inc.
The federal funds rate, the interest on overnight loans between banks, remained at 3.375%.
Currency
The dollar declined against most other major currencies as dealers speculated that the greenback has peaked against the German mark.
Currency dealers said activity in the foreign exchange markets was light and mostly limited to end-of-the-month bookkeeping transactions.
A lack of any market-moving news also made for a quiet session, said Zlatko Glamuzina, vice president and chief dealer at Banco di Sicilia in New York.
The dollar declined to 1.592 German marks in New York, down from 1.598 marks on Friday.
Glamuzina said the market seemed less preoccupied with the possibility of a cut in German interest rates, which would weaken the mark. For some time, traders anticipating such a rate reduction had been buying dollars.
The greenback was quoted at 124.70 Japanese yen Monday, up from 124.45 yen late Friday.
Market Roundup, D10
