Stocks Climb on Jobs Report, Steadier Rates
Market Overview * The stock market climbed Friday, given a boost by a positive February employment report and steadier long-term interest rates.
* Short-term Treasury securities prices were hammered by speculation that interest rates will be pushed higher soon, but long-term bonds barely budged.
* The volatile bond market and strong economic report propelled the dollar solidly higher.
Markets
Wall Street’s advance was broadly based, with a wide range of stocks participating. But the Dow Jones industrial average and more comprehensive market measures finished below their best levels of the session.
After rising more than 20 points in morning action, the Dow industrials ended 7.88 points higher at 3,832.30 and concluded the week down 6.48 points.
In the broader market, advances outpaced declines by 3 to 1 on the New York Stock Exchange, where volume came to 311.85 million shares, up from Thursday’s 291.96 million.
A strong showing by technology stocks made for a solid performance by the Nasdaq stock market. Its composite index of mostly smaller stocks added 5.97 points to 790.55, giving it a 6.77-point gain for the week.
Stock investors focused on the promising aspects of the Labor Department’s report that showed the nation’s unemployment rate dipped an unexpected two-tenths of a percentage point to 6.5% last month as non-farm payrolls expanded by 217,000.
A separate report showed the government’s chief economic forecasting gauge rose a modest 0.3% in January, suggesting that economic growth will continue this year but at a more moderate pace.
Among the market highlights:
* Managed health care company TakeCare and health maintenance organization operator FHP International signed a $1.1-billion merger agreement. TakeCare rose 7 7/8 to 75 1/4 while FHP dropped 1 3/4 to 26 3/4.
* Auto stocks were strong after reporting gains in February car sales Thursday. Ford rose 1 1/2 to 65 1/8, Chrysler added 1 1/2 to 59 1/2 and General Motors ended up 1 1/2 to 62.
* Calgene fell 1 1/2 to end at $10.50 after the Food and Drug Administration postponed a review of its genetically engineered tomato.
* Intel rose 1 5/8 to 69 5/8, Cisco Systems advanced 2 1/4 to 79 and Sun Microsystems gained 1 1/4 to 29 3/8.
* Proffitt’s jumped 4 to 23 3/4 after it announced it was merging with another specialty department store, McRae’s Inc.
* Gibraltar Steel gained 7/8 to 15 1/8. Salomon Bros. issued a “buy” rating on the firm.
Stocks also moved ahead on major foreign markets, including Tokyo, where the 225-share Nikkei average closed up 360.14 points at 19,966.00. In Frankfurt, the DAX 30-share average ended at 2,060.09, up 22.19 points, and London’s Financial Times 100-share average finished 31.5 points higher at 3,278.0.
Mexico City’s Bolsa index gained 7.59 points to close at 2,569.52.
Other Markets
The bond market’s concern was aroused by warnings on Wall Street that the central bank may act swiftly to quell uncertainty in the financial markets, following its interest rate hike Feb. 4.
The Fed’s failure to lift interest rates again Friday--despite the release of the Labor Department’s closely watched employment report--merely intensified the guessing game.
By day’s end, the price of the Treasury’s main 30-year bond yield was unchanged from Thursday at 6.83%, while its price edged up 1/16 point, or 63 cents per $1,000 in face value.
However, prices of shorter-term maturities dropped. Short-term Treasury securities fell between 1/8 point and 3/16 point, and intermediate maturities fell between 5/32 point and 3/16 point, the Telerate Inc. financial information service reported.
Treasury bills were hit even harder, with yields rising sharply, since the Fed targets short-term interest rates in its monetary policy actions. Higher rates on new securities would erode the value of already sold bills.
Meanwhile, in currency trading, the greenback’s strongest moves came against the Japanese yen.
In New York, the dollar fetched 105.50 Japanese yen, up from 103.80 on Thursday. It rose to 1.719 German marks, up from 1.710.
Elsewhere, gold prices fell on the New York Comex to $377.60 an ounce, up 30 cents from Thursday. Silver brought $5.239, off 0.2 cent.
Market Roundup, D4
