FINANCIAL MARKETS : Concentrated Buying Pushes Dow Up 9; Yields Also Rise
Market Overview
* A burst of buying concentrated in some key blue-chips pushed Wall Street stocks higher near the end of the session Thursday, while buyers nibbling at recently battered secondary stocks helped boost the rest of the market.
* More signs of economic strength pushed up yields on Treasury bonds slightly.
Stocks
Trading was dominated by individual company news and failed to follow a marketwide pattern. Activity was restrained as market professionals prepared to adjust their holdings today, when key stock options and futures expire.
This quarterly phenomenon typically inflates volume and causes volatility in the market.
The Dow industrials closed with a gain of 9.22 points at 3,726.14 after meandering for much of the day. The Dow had lost a total of 47.51 points Tuesday and Wednesday.
In the broader market, advancing issues outpaced declines by better than a 7-6 margin on the New York Stock Exchange.
And the Nasdaq market of mostly smaller stocks gained for a second day, after seven straight losses. The composite index rose 2.56 points to 755.53.
Economic news appeared to have little influence on stocks. Instead, analysts said the market may be in the final stages of year-end tax selling, which often depresses stocks as investors rush to take profits or losses incurred during the year.
Strength in stocks overseas was a plus for Wall Street. Tokyo’s 225-share Nikkei average closed at 17,789.28, up 300.13 points, continuing its rebound.
In Frankfurt, the DAX index also rebounded, surging 32.4 points to 2,137.45. London’s FTSE-100 index rocketed 32.4 points to finish at a record 3,311.2.
In Mexico City, meanwhile, the Bolsa index rose 32.99 points to 2,422.85.
Among U.S. market highlights:
* Tech issues helped pace the Nasdaq market’s gains. Creative Technologies surged 1 5/8 to 26 3/4, Sybase gained 1 to 42, Oracle jumped 1 1/8 to 35 1/4 and Dell Computer rose 1 1/8 to 24 3/8.
* Some telecom issues also snapped back. Nextel Communications rocketed 3 to 36 1/2. Analysts repeated “buy” recommendations after a company conference call.
* Procyte gained 3 3/8 to 14 3/8 after U.S. regulators cleared the restart of clinical trials for its Iamin foot ulcer treatment. A halt in testing last week caused a stock selloff.
* Viacom Class A and Class B shares surged after Salomon Bros. began coverage of the stock with a “buy” recommendation. The Class A shares leaped 2 5/8 to 50 7/8 and the Class B shares gained 2 1/2 to 46. Salomon said the proposed merger between Viacom and Paramount Communications would create a “programming powerhouse.”
* On the NYSE, Eastman Kodak was the second-most-heavily traded issue, and it extended its slide, down 1 1/4 to 54 1/4 after falling 7 1/4 on Wednesday. The firm’s new chief warned that next year’s earnings will fail to meet Wall Street expectations.
* Merry-Go-Round plunged 3 1/4 to 2 7/8 as more than 9.7 million shares changed hands. Investors dumped the retailer amid rumors that the company is having trouble meeting its financial obligations.
* Another active Big Board loser was Fruit of the Loom, which slumped 3 3/8 to 24 1/2. The underwear firm issued a gloomy assessment of fourth-quarter earnings.
* The Dow transportation average was hurt by a slide in UAL stock. UAL, parent of United Airlines, fell 4 3/8 to 144 1/4 as the company’s board was presented with details of a tentative employee buyout agreement valued at at least $4.55 billion. Investors reportedly found it difficult to assess the offer because little information was available.
Other Markets
The 30-year T-bond yield inched up to 6.29% from Wednesday’s 6.27%, after several government reports indicated an expanding economy.
The government reported increases in both merchandise imports and exports in October and a decline in the number of Americans who filed for unemployment insurance last week.
Investors in bonds are concerned that stronger economic growth will aggravate inflation, which cuts into the value of fixed-income securities.
However, reaction to Thursday’s news was muted because it merely confirmed what previous reports have already shown.
Meanwhile, the dollar fell against most other major currencies as the United States announced it had the worst ever trade deficit with Japan.
Elsewhere, gold for current delivery closed off $1.40 at $386 an ounce on the New York Comex. Silver fell 7.5 cents to $5.01.
Market Roundup, D6
