Your Money : FINANCIAL MARKETS : Dow Up 13 as Kodak Fuels Rally
A late flurry of buying lifted the Dow Jones industrial average to a third straight winning session Tuesday, buoyed by a solid gain in shares of Eastman Kodak, which said it was selling its drug and personal care businesses. The broader market finished lower.
Before the late rally, stocks were mired in a narrow trading range as investors focused on individual stocks. At the end, blue chip averages rose 13.39 to 3,714.41 as Eastman Kodak and several economically sensitive stocks climbed. It was the best close since March 28, when the popular market indicator ended at 3,762.35.
Kodak’s shares climbed on news that the photographic firm was selling its $3.7-billion drug and personal care units to focus on its core imaging business. Kodak closed up 1 3/8 at 46 1/8 after climbing initially to 47.
But more comprehensive measures of market performance turned in so-so readings. Two days of advancing stock prices encouraged investors to sell and collect profits, which contributed to a downward bias on Wall Street.
In the broader market, stocks that declined outnumbered advancing issues by about 9 to 8 on New York Stock Exchange volume of 288.02 million shares, down from 296.11 million late Monday.
The NYSE composite index finished nearly in neutral at 251.36, off 0.04, and Standard & Poor’s 500 stock index ended almost unchanged at 453.03, up 0.01. Among other indicators, the Nasdaq composite index of mostly smaller issues fell 1.31 to 739.37.
Treasury bond prices fell for the fourth straight session amid concern about the weakening dollar and speculation that the Federal Reserve might soon raise short-term interest rates.
The bellwether long bond’s yield edged up to 7.34% from 7.44%, which pushed its price down 5/32 point, or $1.56 per $1,000 in face value. Prices and yields move in opposite directions.
Analysts said bond prices dropped mostly in response to the continuing decline of the dollar in foreign exchange trading. The greenback fell against most major currencies, although it recovered slightly against the Japanese yen.
Rumors that another buyer might be accumulating Time Warner Inc. shares pushed the price of the entertainment giant’s stock up 3 7/8 to 40 in heavy trading. Seagram Co. has acquired 14.6% of the stock but would trigger Time Warner’s newly adopted “poison pill” if it acquires more than 15% and fails to make an offer for the entire company.
Wall Street has speculated that Seagram might test Time Warner’s defensive measure in court, but no such action has materialized.
The dollar’s recent slide against the Japanese yen and the German mark has intensified speculation that U.S. rates will be lifted to prop up the flagging dollar. Higher U.S. rates would tend to boost the dollar by making returns on dollar-denominated investments more rewarding.
The dollar fell Tuesday to a 6 1/2-month low against the mark amid continued concerns about U.S. interest rates.
By late afternoon in New York, the dollar fetched 1.637 marks, down from 1.649 marks late Monday. That’s the lowest point for the dollar against the mark in New York since a 1.617 mark rate on Oct. 15. The dollar gained on the Japanese yen, rising to 102.0 yen from 101.65 yen the day before.
Gold and silver prices declined.
Overseas stocks were generally weaker. London’s Financial Times 100-share average closed down 25.3 at 3,100.0, and Frankfurt’s 30-share DAX average ended at 2,252.29, down 16.36 points. The Tokyo stock market was closed for the “Golden Week” holidays and will reopen Friday.
Mexico’s Bolsa index closed up 8.50 points at 2239.23.
Market Roundup, D6
