Dow Up 24.21; Currency and Bonds Stable
Market Overview * U.S. stocks rose as buyers returned, unfazed by worries about a U.S.-Japan trade war. Most foreign stock markets stabilized after Monday’s slide.
* The dollar recovered some of its Monday plunge against the Japanese yen, as dealers took a breather and waited for the next phase in the U.S.-Japan trade war.
* Treasury bond yields ended largely unchanged. California sold $3.2 billion in short-term notes.
Stocks
Investors were encouraged to bargain hunt as bond and currency markets stabilized, traders said.
The Dow Jones industrials rose 24.21 points to 3,928.27 in active trading, as winners topped losers by about 4 to 3 on the New York Stock Exchange.
The Nasdaq composite index of mostly smaller stocks also advanced, rising 4.67 points to 790.12.
Analysts said the market’s quick recovery after its slump late last week illustrated a strong underlying level of confidence on the part of investors.
On Monday, with the U.S.-Japan trade dispute heating up, “The market had every excuse to get hurt,” said Bruce Bittles, strategist at J.C. Bradford. Instead, the Dow gained 9 points Monday, setting the stage for Tuesday’s rally.
Despite fears of an all-out trade war, many investors believe the United States will eventually prevail in opening Japanese markets to outside goods, experts say.
And in the meantime, a side effect of the current dispute--a weak dollar--is bullish for U.S. companies that export to Japan and other countries worldwide because it automatically cuts the prices of U.S. exports.
Even the Japanese market appeared to be stabilizing early today. Tokyo’s Nikkei stock index was up 159.51 points to 19,134.11 at midday, after plunging 531.45 points on Monday and 484.65 points on Tuesday.
Also in Asia early today, Singapore’s Straits Times index was up 10.96 points to 2,340.49, and Bangkok’s SET index gained 14.97 points to 1,428.94.
Among other foreign markets, London’s FTSE-100 index rose 29.7 points to 3,393.20 on Tuesday, while Frankfurt’s DAX index eased 0.39 point to 2,115.62.
Among U.S. market highlights:
* The Dow was pulled higher by AlliedSignal, up 1 3/4 to 79 3/4; Goodyear, up 1 1/2 to 47 1/2; McDonald’s, up 1 1/4 to 61 3/4, and 3M Co., up 2 5/8 to 108 1/2.
Other industrial issues continuing to gain on optimism about the economy included Dover, up 1 1/4 to 61 1/2; Ameron, up 1 to 41 1/2; Trinova, up 1 3/4 to 38 3/4; ITT, up 4 to 100 7/8.
* Semiconductor stocks also rallied. Intel gained 1 1/8 to 65, Motorola advanced 2 1/8 to 101 3/8 and Texas Instruments zoomed 2 7/8 to 76 3/8.
* In the takeover arena, United Healthcare fell 5/8 to 85 after agreeing to buy Ramsay-HMO in a stock swap. Ramsay jumped 9 3/8 to 55 1/4.
* Among Southland issues, industrial pump maker BWIP gained 1/4 to 18 1/2. An agency of the Singaporean government disclosed that it has taken an 8.4% stake in the firm, for investment purposes. BWIP said it was unaware of the stake until now.
Also, personal-planner maker Day Runner shot up 1 1/2 to 15 on a strong quarterly earnings report.
Other Markets
Bargain hunters helped boost the U.S. dollar after its huge selloff Monday, when traders dumped dollars on concerns that the Clinton Administration may drive the American currency lower against the Japanese yen after last week’s breakdown of trade talks.
The dollar finished in New York at 103.85 yen, up from 102.65 on Monday, its lowest closing level since last Aug. 18.
At midday today in Tokyo, the dollar was at 103.30 yen.
Analysts said the dollar got an additional lift Tuesday after the government reported that industrial production rose in January, pointing to continuing economic strength.
Moreover, reports that Bank of Japan bought more than $1 billion worth of dollars for yen on Tuesday discouraged dollar sellers.
But many traders still believe the dollar is poised to test the 100-yen level, if trade friction with Japan isn’t resolved soon.
Elsewhere Tuesday:
* Treasury bond yields were mostly flat. The 30-year T-bond yield was unchanged at 6.45%.
* Cash-strapped California sold a record $3.2 billion in short-term notes to help fund state operations through the end of the current fiscal year and to pay off part of its long-term debt.
The state sold $1.2 billion in notes at an average interest rate of 3.02% and $2 billion at an average rate of 2.81%. The first series will mature on Dec. 21, the second on July 26.
* On the Comex, near-term gold futures fell 10 cents to $383.80 an ounce. Silver lost 8.8 cents to $5.26.
* Oil eased further. March light sweet crude futures fell 7 cents to $14.06 a barrel, following Monday’s 59-cent drop.
Market Roundup, D8
