Sugar Futures Soar on Storm Damage Fears
Market Overview
A summary of Monday’s trading activity, as compiled from Times staff and news service reports.
* Sugar futures prices surged to their highest level in more than 2 1/2 years amid fears of severe storm damage in Cuba, the world’s largest raw sugar exporter. Other commodity prices also soared.
* Treasury bond yields rose further as commodity prices moved upward and traders worried about inflation.
* Blue chip stocks advanced in the lightest trading of the year as the weekend blizzard dampened volume. The Dow Jones industrial average rose 14.59 points to 3,442.41.
Commodities
The weekend blizzard helped send prices of commodities higher and propelled the Commodity Research Bureau’s price index up 2.40 to 210.19. The index is considered a signal that inflation will accelerate.
Raw sugar for May delivery leaped 0.95 cent on New York’s Coffee, Sugar & Cocoa Exchange to 11.50 cents a pound, the highest settlement for a near-term contract since Aug. 24, 1990.
Florida was also hit hard by the storm but state agriculture officials said the orange groves were spared serious damage.
But traders feared that the winds and freezing temperatures stripped or killed blossoms, affecting next year’s production.
May orange juice advanced 3.2 cents to 78.10 cents a pound at the Cotton Exchange.
Storm-related buying also helped boost livestock and meat futures.
The Mexican news agency Notimex reported heavy damage to Cuban farm crops, including sugar cane fields, from the weekend storm that roared out of the Gulf of Mexico.
Port and processing facilities also were reported to have been damaged, said Arthur Stevenson, sugar analyst with Prudential Securities Inc. in New York.
On New York’s Commodity Exchange, gold for April delivery rose $1.30 to $329.30 an ounce; March silver rose 3.5 cents to $3.654 an ounce.
Light, sweet crude oil fell 13 cents to $20.16 a barrel on the New York Mercantile Exchange.
Credit
The yield on the government’s bellwether 30-year bond rose to 6.89% from 6.86% Friday. Its price, which falls when yields rise, slipped 7/32 point, or $4.38 per $1,000 face amount.
On Friday, the bond fell nearly $13 after the Labor Department reported a bigger than expected rise in wholesale prices during February.
The rises in the Commodity Research Bureau’s price index was a concern for bond traders, who worry that inflation will erode the value of their fixed-income securities.
Yields on already outstanding three-month Treasury bills rose to 3.03% as the discount rose 2 basis points at 2.98%.
The federal funds rate, the interest on overnight loans between banks, was quoted at 3 1/8%, up from 2 15/16% late Friday.
Stocks
Advancing issues outnumbered declines by about 11 to 9 on the New York Stock Exchange.
Volume on the floor of the Big Board came to 195.9 million shares, down from 255.4 million in the previous session. It was the slowest session so far this year.
This weekend’s massive snowstorm dampened volume, with many traders unable to reach their desks. Volume was further slowed by the absence of Goldman, Sachs & Co., which halted its trading operations after a fire forced evacuation of some of its offices in lower Manhattan.
The market seesawed, closing at the day’s high. Analysts said investors were worried by Friday’s 29-point decline and by higher interest rates.
Among the trading highlights:
* The cyclical stocks, those most closely tied to the fate of the economy, fared best. Aluminum Co. of America rose 1 1/4 point to 70 3/4, Georgia Pacific rose 2 1/4 to 65 1/2, and Louisiana Pacific rose 2 1/2 to 72 3/8.
* In actively traded NYSE issues, RJR Nabisco was unchanged at 8 1/4, and Philip Morris fell 1/2 to 64 5/8. Tobacco stocks have taken a beating in recent weeks on concerns that the government will impose an excise tax on cigarettes and alcohol.
* Storage Technology rose 1/4 to 27 1/4. The stock has risen significantly since Thursday on various rumors, including some surrounding the company’s Iceberg data storage system.
* Nike rose 4 5/8 to 76 3/8 after reporting solid third-quarter earnings.
* Digital Communications fell 2 1/8 to 17 1/8 after forecasting poor third-quarter earnings.
* In NASDAQ trading, Frame Technology fell 4 3/8 to 7 7/8 after saying first-quarter revenue and profit will be short of market expectations.
* Cape Cod Bank & Trust fell 4 1/2 to 21 1/2 after saying continued payment of quarterly dividends can’t be assured. The bank had agreed to an FDIC order to halt certain bank practices.
In overseas trading, London stocks ended steady to firmer, with the Financial Times stock exchange index of 100 leading shares up 6.5 points to 2,922.4. In Frankfurt, the DAX 30-share index fell 4.57 points to 1,702.57. In Tokyo, stocks ended a touch higher, with the 225-share Nikkei index gaining for the seventh consecutive day. The Nikkei average was up 48.66 points to 18,086,18.
Currency
The dollar ended mostly lower Monday against major foreign currencies in quiet trading.
Currency dealers said technical factors were largely responsible for Monday’s dollar trading in the absence of new economic news.
In New York, the dollar finished at 118.65 yen, up from 118 yen on Friday. But the dollar was weaker against the British pound compared to Friday’s rates. Sterling fetched $1.4350 in New York, up from $1.4340.
Market Roundup, D8
