FINANCIAL MARKETS : Dow Slips 4.47 as Blue-Chips Temper a Rally
Market Overview
* Late profit-taking spoiled a pre-Christmas rally in blue-chips, but most other stocks closed higher Thursday, thanks to strength in bond prices, new upbeat numbers on the economy and customary year-end buying.
* The yield on the Treasury’s main 30-year bond held at 6.21%, with its price rising slightly.
* U.S. markets will be closed today because of the holidays.
Stocks
The Dow Jones Industrial Average was above its all-time record high for most of the day, but closed 4.47 points off, at 3,757.72. That was still the third highest close on record.
In the broader market, the rally held firm. Advancing issues outnumbered declining ones about 3 to 2 on the New York Stock Exchange, with 1,257 issues rising, 835 falling and 635 unchanged.
The Standard and Poor’s 500-stock index rose 0.06 to 467.38. The Nasdaq index climbed 2.63 to 758.70.
Analysts said the market was caught up in year-end currents, with last minute portfolio changes obscuring any clear trend.
“We had a little flurry right at the end. This is the end of the month, end of the quarter, end of the year for a lot of firms,” said one trader.
Fund managers add to their portfolios stocks considered to be the year’s big winners and sell off those that have been losers.
Meanwhile, several European stock markets rocketed to record highs. In London, the Financial Times 100-stock index closed up 40.8 points at 3,396.5, beating the previous all-time peak of 3,378.6 that was reached just two days before. In Frankfurt, German equities soared to record highs in a year-end rally on hopes of lower interest rates; the DAX 30-share index closed up 25.33 points at 2,222.84, but was below an earlier intra-day record of 2,227.88.
The Tokyo stock market was closed for a national holiday. It will be open today.
Among the U.S. market highlights:
* UAL Corp.’s stock lost 1 7/8 to 146 5/8 as Wall Street received with caution the news that UAL’s board of directors had approved a multibillion-dollar employee buyout plan for United Airlines.
* Paramount Communications, which said Wednesday it entered into a merger agreement with QVC Network Inc., retreated 1 to 78 5/8. QVC slipped 1/4 to 40 in Nasdaq trading. Rival Paramount suitor Viacom Inc.’s class B shares rose 3/8 to 51 3/8 on the American Stock Exchange. Arbitragers said Viacom will try to top QVC’s offer.
* Blue-chip issues that helped send the Dow sliding included Minnesota Mining & Manufacturing, down 1 1/2 to 108 7/8; IBM, down 5/8 at 58 5/8 and General Motors, down 3/8 at 55 1/4.
* Technology issues helped the Nasdaq. Chip maker Intel was up 3/8 to 62 1/8, while personal computer maker Sun Microsystems gained 5/8 to 28 5/8. On the NYSE, Motorola rose 1 1/4 to 90 1/4.
Broderbund Software, another Nasdaq stock, dropped 6 to 34 1/2, despite a report of first-quarter earnings that was in line with expectations. Alex. Brown & Sons downgraded the stock to “neutral” from “buy,” lowering its estimate of annual earnings amid doubts about revenue growth.
Other Markets
The price of the Treasury’s main 30-year bond rose 3/32 point, or 94 cents per $1,000 in face value.
On Wednesday, bond prices raced upward after demand was strong at the Treasury’s auction of new 5-year notes.
The market closed early Thursday, and traders were reluctant to stake out new positions despite strong economic data that was released by the government.
Yields on three-month Treasury bills were unchanged at 3.11% as the discount held at 3.05%. Six-month yields were unchanged at 3.28% as the discount held at 3.19%. One-year yields were unchanged at 3.56% as the discount held at 3.43%.
Yields are the interest rates bonds pay by maturity; the discount is the interest at which they are sold.
In other markets:
* The dollar was mixed against most other currencies as pre-holiday caution outweighed the U.S. economic data. The dollar slipped to 1.6940 German marks in New York from 1.7020 marks late Wednesday.
* Gold bullion fell 20 cents to $387 an ounce for the most-active February contract on New York’s Commodity Exchange.
* Oil prices fell after the Energy Department reported domestic inventories as much larger than did atrade group. Light, sweet crude oil for February delivery settled at $14.48 a barrel, down 29 cents, at the New York Mercantile Exchange.
Market Roundup, D6
