Stocks Rebound; Oil Jumps Again : Market Overview
The stock market pulled out of a weeklong slump as battered shares of International Business Machines showed signs of stabilizing. Technology and transportation stocks led the rally.
* Oil prices continued to rise as another OPEC member announced a production cutback.
Stocks
The Dow Jones industrials, off 68.63 points the last five trading days as profit takers took control, rose 14.05 points to 3,269.23.
Broader indexes posted much bigger gains, led by the NASDAQ composite of smaller stocks, which jumped 8.83 points or 1.4% to 658.46.
On the New York Stock Exchange, advancing issues outnumbered declines by more than 5 to 3 on volume of 251.64 million shares, against 244.04 million Wednesday.
Beleaguered IBM, which had tumbled a total of 11 points Tuesday and Wednesday on word of its plans for a far-reaching restructuring, recovered 1 1/8 to 53 on Thursday.
But traders said the market was paying scant attention to IBM, which long ago lost its bellwether status. Rather, investors continue to look for stocks of companies that would benefit from a stronger economy in 1993.
More good economic news came from the Federal Reserve Bank of Philadelphia, which reported a brisk pickup in the pace of manufacturing growth in its region.
Also, government data showed the nation exported a record amount of goods in October.
Among the market highlights:
* Tech stocks gaining on expectations of a stronger economy ahead included chip maker Intel, which rocketed 3 to 86 1/2 one day after projecting better than expected fourth-quarter earnings. Other gainers included Compaq, up 1 3/4 to 44 3/4; Hewlett-Packard, up 2 to 65 5/8; Microsoft, up 3 to 90; Dell Computer, up 1 3/4 to 43 3/8, and AST Research, up 1 3/8 to 20 5/8.
But Southland-based software firm Quarterdeck slumped 1 3/8 to 4 1/8. Montgomery Securities downgraded the stock to sell from hold, citing rising competitive pressures on the company.
* Airline stocks were bolstered after Delta announced a series of cost-cutting measures, including salary reductions and a cut in its quarterly dividend from 30 cents a share to 5 cents. Investors applauded the moves in the hope that they will stem Delta’s losses.
Delta zoomed 2 7/8 to 51 3/4. Among competitors, United Airlines parent UAL jumped 3 3/8 to 120, American Airlines parent AMR gained 1 3/4 to 62 3/8 and Southwest soared 2 1/8 to 28 3/8.
* Railroads also gained on economic optimism. CSX Corp. rose 1 7/8 to 69 7/8, Union Pacific added 2 to 59 5/8, and Norfolk Southern was up 1 1/8 to 63 1/4.
* Investors also returned to some classic growth stocks. Home Depot surged 2 1/8 to 67 1/4, Wal-Mart gained 1 to 65 1/8, ATT added 7/8 to 49, and Johnson & Johnson rose 1 1/8 to 52 3/4. Also, Coca-Cola gained 7/8 to 41 1/2. It said its global business has picked up in the fourth quarter after a sluggish third quarter.
* Investor enthusiasm for new stock issues continued. Snapple Beverage, which went public this week at 20, added 4 1/8 to close at 33 1/8 in NASDAQ trading.
Overseas, Tokyo stocks closed firmer, with the Nikkei average up 169.20 points to 17,437.91.
Stocks also closed higher in London, with the Financial Times 100-share average adding 7.5 points to 2,740.3. In Frankfurt, the DAX index gained 4.10 points to 1,476.17.
Commodities
Oil futures extended strong gains on the New York Mercantile Exchange on news that Venezuela will cut its crude oil production by an unspecified amount.
The news followed word on Wednesday that Nigeria will cut crude production by 10%.
Light, sweet crude oil for January rose 29 cents to $19.70 a barrel, after jumping 46 cents Wednesday.
Precious metals, which tend to advance with oil prices, gained. Gold for near-term delivery added 50 cents to $338.40 an ounce on New York’s Comex. Silver rose 4.3 cents to $3.77.
Credit
Interest rates were mostly flat, as investors showed little reaction to more favorable news on the economy. The yield on the Treasury’s main 30-year bond was 7.42%, off from 7.43% Wednesday.
Each time traders have tried to push yields up recently, “it seems to bring forward some buying,” observed William Griggs, managing director at Griggs & Santow.
The federal funds rate--the interest on overnight loans between banks--was 2.94%, unchanged.
Currency
The dollar was mixed against key currencies in thin trading even as the government released positive economic statistics.
Hillel Waxman, chief foreign exchange dealer with Bank Leumi Trust, said there was not much activity in the dollar market because the holiday mood had already set in, leaving trading thin.
In New York, the dollar closed at 122.74 Japanese yen, down from 122.95 Wednesday. It also closed at 1.557 German marks, unchanged.
Market Roundup, D6
