Dow Ekes Out Gain of 5.67 to 3,370 : Market Overview
The stock market eked out a small gain in trading, slowed by a massive explosion beneath the World Trade Center that forced some firms to evacuate traders from the buildings.
* Long-term Treasury bond yields edged higher on light volume after the explosion curtailed activity at many New York brokerages and distracted traders elsewhere.
* The dollar firmed against most major currencies, particularly the Japanese yen, as traders tried to anticipate the outcome of this weekend’s meeting of the Group of Seven ministers.
Stocks
The New York and American stock exchanges continued to operate after a massive explosion under the Trade Center left seven dead and 300 injured.
The Dow Jones average rose 5.67 points to 3,370.81. In the broader market, advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange.
The NYSE’s composite index rose 0.70 point to 244.08. On the American Stock Exchange, the major market index rose 1.41 to 406.84.
Volume shrank as some major firms evacuated employees from local offices. “There’s no doubt that the minute that it hit, it began to impact the volume,” said Larry Wachtel of Prudential Securities. Big Board volume totaled 234.16 million shares, compared to Thursday’s 260.05 million shares.
Many investors stepped to the sidelines on Friday after a very volatile week that saw the Dow Jones industrials rise 20 points on Monday, fall 19 points on Tuesday, rise 33 points on Wednesday and gain a total of 10 points on Thursday and Friday. The Dow gained 48 points on the week.
It was the second consecutive week of dizzying rides that resulted from President Clinton’s economic address to Congress on Feb. 17.
“I think overall, the market is still trying to get its footing (after) the very rapid internal gyrations over the past couple of weeks,” said Eric Miller, a market strategist at Donaldson, Lufkin & Jenrette. “A lot of portfolio managers are a little unnerved by the weakness in some particular sectors.”
Volume also lightened after a fire at the World Trade Center in lower Manhattan sent many brokerage employees home early for the weekend.
Among the market highlights:
* Airline stocks retreated. Analysts and investors continue to fear that President Clinton’s proposed energy tax will raise airline costs and put a crimp in travel. AMR Corp. was down 1 to 59 7/8, Delta Air Lines was off 1 1/8 to 49 1/4, and UAL Corp. was down 1 1/8 to 118 1/8.
Weak airline stocks pushed the Dow Jones transportation index down 14.10 points, or 0.92%, to 1,518.10.
* Chemical Banking Corp. led the most actives on the NYSE and fell 1 1/8 point to 40 1/2 after a block of 3.8 million shares, or 1.5% of total outstanding shares, traded at 40. Chemical sold the shares to finance its purchase of the First City Bancorporation by its affiliate, Texas Commerce Bancshares.
* Conner Peripherals was second and fell 1 3/8 to 16 7/8. The computer disk-drive maker said late Thursday that its first-quarter net income will be below analysts’ estimates. Lehman Bros. downgraded disk-drive stocks, and Kidder Peabody downgraded Conner.
* Conner’s troubles sent other disk maker stocks lower. Quantum Corp. fell 1 5/8 to 15, while Seagate Technology Inc. was off 1 to 15 5/8.
* Kroger fell 3/8 to 16 1/4 in active trading. Late Thursday, Kroger made a secondary offering of 12.5 million common shares at $16 apiece, the proceeds of which will be used to pay down debt or for general corporate purposes.
* WalMart, whose stock recently split, was up 3/4 to 32 1/2 in active trading.
* Dillard Department Stores lost 3 5/8 to 44 3/8 in active trading. The company reported fourth-quarter earnings of 83 cents per share, compared to analysts’ estimates of $1.01. In a conference call to analysts, Dillard officials said the department store chain’s sales had dropped since President Clinton’s announcement of his economic plan.
* Amgen led the most actives in NASDAQ trading, closing at 36 1/4, down 3/4. The biotechnology company was recovering from a sharp drop on Thursday based on disappointing earnings projections.
* Intel Corp. was down 1 1/2 to 116 1/2. The company’s board today approved a 2-for-1 stock split.
Overseas, share prices advanced strongly on the Frankfurt bourse on intensified talk of lower interest rates. The DAX 30-share average gained 25.44 points to close at 1,684.35. London shares also closed sharply, with the Financial Times 100-share average ending 39.3 points up at 2,868.0. Tokyo shares ended slightly firmer, with the 225-share Nikkei average ending 45.96 points higher at 16,953.35. In Mexico City, the Bolsa index surged 42.53 points, or 2.8%, to 1,546.68, after four days of losses. A rally in Telmex sparked the gains.
Credit
Trading continued following the explosion, but was extremely quiet. Several major firms located in the trade center’s twin towers--Salomon Bros., Dean Witter, Discover & Co. and Cantor Fitzgerald Corp.--were forced to shut down or sharply curtail operations.
The yield on the Treasury’s key 30-year bond rose to 6.89%, while its price was down 3/16 point, or $1.88 for every $1,000 in face value.
On Thursday, the bond’s yield closed at 6.88%. Bond prices and yields move in opposite directions.
“The big story is the fire,” Gib Clark, Daiwa Securities Inc. chief trader, said. “I don’t think anybody’s paying any attention to the market.”
The federal funds rate, the interest on overnight loans between banks, was 3.25%, up from 3.125% late Thursday.
Other Markets
The weekend meeting in London of the G-7--the finance ministers from the United States, Japan, Germany, Britain, France, Canada and Italy--was the focus of attention for many market participants.
Earl Johnson, a vice president at Harris Trust & Savings Bank in Chicago, said he didn’t expect the meeting to produce any agreements concerning the Japanese yen’s value. The yen, which has rallied strongly in recent days, slipped against the dollar as a result, he said.
The dollar closed at 118.25 Japanese yen in New York, up from Thursday’s 117.475 yen.
In greenback settled at 1.646 German marks, up from 1.635 marks.
The British pound closed at $1.424, less expensive than $1.432 late Thursday.
Meanwhile, gold fell $1.60 to $329.00 an ounce on New York’s Commodity Exchange, while silver rose 2.6 cents to $3.565 an ounce.
The New York Mercantile Exchange closed at 1:30 p.m. after the explosion under the World Trade Center, where the Merc has its trading floor. Before the abrupt closure, light, sweet crude oil for April was 6 cents lower at $20.40 a barrel.
