Stocks Rise on Economy Reports; Rates Ease : Market Overview
* Big-name stocks bounded ahead Friday, drawing an overall positive view of a mixed bag of economic statistics and a rally in bonds. The Dow index jumped 25.99 points to 3,581.11.
* Bond yields eased as the market’s inflation fears were cooled by news of sluggish growth in the manufacturing sector.
Stocks
The market saw good news in a slew of economic reports.
The government’s chief gauge of future economic activity jumped 1% in August, the year’s best gain.
And while the National Assn. of Purchasing Management’s monthly survey revealed lingering weakness in the manufacturing sector in September, the trend still suggests that the economy is expanding, albeit slowly.
Industrial stocks were the day’s stars. Many had been beaten down in September. The Dow’s 0.7% rise for the day was the best of any major stock index, and left it up 38 points for the week.
But the Nasdaq market of smaller stocks, the hottest market in September, took a breather. The Nasdaq composite index gained just 0.1% on Friday, and losers outnumbered winners 12 to 11.
Among Friday’s highlights:
* Energy stocks helped buoy the Dow, on reports that the Clinton Administration is planning new incentives to spur U.S. drilling. Chevron rose 5/8 to 98 3/8, Exxon gained 3/4 to 66 1/4, Texaco jumped 1 1/8 to 68 7/8, Unocal leaped 1 to 29 1/4, Sonat soared 1 3/8 to 36 3/8 and Halliburton surged 2 1/4 to 39 3/8.
* Manufacturing stocks advancing included Ford, up 1 1/4 to 56 1/2; GM, up 3/4 to 42 1/2; Caterpillar, up 1 1/4 to 80 1/4; Alcoa, up 1 5/8 to 68 3/4; PPG Industries, up 1 3/8 to 66 5/8, and Timken, up 7/8 to 30 5/8.
* On the downside, HMO stocks tumbled in sympathy with U.S. Healthcare, which sank 4 to 46 3/4 after New York state regulators rejected the company’s request for a 6.2% annual premium rise and instead ordered a 3.9% rate cut.
Other HMOs losing ground included United Healthcare, off 2 3/4 to 65 7/8; Oxford Health, down 3 to 78 3/4; Pacificare A, off 1 7/8 to 36, and Ramsay-HMO, down 1 3/4 to 31.
* Many technology stocks took a breather. Sun Microsystems fell 1 7/8 to 22 1/8 after Prudential Securities forecast a quarterly shortfall in sales. Elsewhere, Texas Instruments sank 2 3/8 to 73 1/8 and Motorola slipped 1 to 100.
Overseas, London’s FTSE-100 index rose 1.8 points to 3,039.3, while Frankfurt’s DAX index eased 3.62 points to 1,912.09.
In Tokyo, the Nikkei jumped 177.42 points to 20,283.13.
Other Markets
Bond yields rose early in the day on news of a jump in the government’s leading economic indicators. But buyers returned later, soothed by the weak showing in the purchasing managers’ survey of manufacturing activity.
By the close, the yield on the 30-year Treasury bond was at 5.99%, down from Thursday’s 6.02%. Shorter-term yields also were lower. Activity was light.
Traders said that, adding up the week’s economic reports, investors’ conclusion is that slow growth will continue, which should leave interest rates at or near current levels through the fourth quarter.
In other markets Friday:
* Crude oil for November settled at $18.63 a barrel, down 16 cents on the New York Merc. Crude had gained 83 cents in the previous two sessions on optimism about OPEC’s plans to cut production.
* October gold slipped 10 cents to $355 an ounce on New York’s Comex. Silver was at $4.04, down 2.1 cents.
Market Roundup, D4
