Wall Street stocks rose Wednesday, buoyed by a drop in long-term interest rates, but the dollar and commodities fell.
The bond market received a boost when the Treasury sold $11 billion of five-year notes at a yield of 6.78%. It was the highest yield rate since five-year notes sold at 6.93% on April 23, 1992. Meanwhile, the yield of the benchmark 30-year Treasury bond fell to 7.36% from 7.40% at Tuesday's close.
Soybean prices plummeted again on the outlook for more rain in the Midwest, and coffee prices, just recently at 5 1/2-year highs, tumbled again, with the July contract down 5.35 cents to 127.75 cents a pound.
The Dow Jones industrial average finished with a gain of 10.13 at 3,755.30 after spending much of the session at depressed levels. It was off about 19 points at its worst.
Broader market barometers behaved similarly.
Despite the positive readings, market analysts were unimpressed. Investors lacked compelling reasons to buy or sell, so they merely mimicked action in the bond market, analysts said.
Illustrating the neutrality, the numbers of stocks rising and falling on the New York Stock Exchange were fairly close, with 1,115 up, 1,025 down and 670 unchanged.
Bond market analysts were puzzled by the market's morning slump, given that a new government report suggested economic growth has eased. Normally, inflation-wary bond traders take comfort in signs of moderating economic activity because price pressures are less apt to get out of hand when the economy expands slowly.
The report that failed to produce the expected response showed orders to U.S. factories for durable goods inched up 0.1% in April. The unexpectedly low increase was the smallest since orders dipped 1.8% during an exceptionally wintry February, according to the Commerce Department.
The dollar fell against European currencies as interest rates continue to rise there. But the decline against the Japanese yen was less pronounced, and some attributed it to optimism over the revival of U.S.-Japan trade negotiations.
Gold and silver prices also ended slightly lower at the Commodity Exchange in New York. June gold edged down 50 cents to $386.80 an ounce, and July silver fell 6.8 cents to $5.557.
The Commodity Research Bureau's widely followed index of 21 commodities sank 3.10 points to 231.59 because of the second consecutive day of plunging futures prices.
At the Chicago Board of Trade, July soybeans fell 20 cents to $6.75 a bushel on top of Tuesday's 37-cent drop.
At the New York Mercantile Exchange, crude oil dropped 22 cents to $17.70 a barrel.
Among the market highlights
* Gtech Holdings tumbled 12 3/4 to 22 7/8 in brisk turnover after the company said it expects its 1995 net income to be flat or below 1994's level.
Investors apparently attached more significance to the downbeat financial forecast than to news that Gtech was included in a consortium awarded the contract to run Britain's National Lottery.
* One stock that commanded investor attention didn't even trade. Trading in Philip Morris was halted all day on the NYSE as its board met to consider plans to divide the company's tobacco and food operations. The company said late in the day that the board had not acted on the matter.
* Hewlett-Packard steadied after a steep intra-day tumble triggered by reports that the company's chief financial officer made cautionary comments about revenue growth in a meeting with securities analysts. Hewlett-Packard finished 5/8 lower at 81 1/4.
* BroadBand Technologies's share price fell 11% amid fears that it may not get a piece of a GTE Corp. video network contract.
BroadBand's stock dropped 1 7/8 to 15 1/2 on Nasdaq trading of 570,300 shares. Bell Atlantic Corp. last week chose AT&T; Corp. and General Instrument Corp. as prime contractors for its multibillion-dollar video network. BroadBand was picked to do future work only on a project-by-project basis.
Smaller company stocks also had a so-so session, with heavy selling in Chiron inciting a setback for biotechnology stocks. The Nasdaq Stock Market composite index closed 0.60 higher at 732.07. The American Stock Exchange's market value index inched up 0.07 to 439.25.
Chiron lost 4 23/64 to 62 17/64 after the stock's investment rating was reduced to "hold" from "buy" by Montgomery Securities.
In moving ahead, Wall Street bucked the trend established in Europe where share prices slumped on major markets. Speculation about the timing and scope of German interest rate reductions put markets on edge, with Frankfurt, London and Paris all finishing lower.
In Frankfurt, the DAX index, having plunged 90 points in the last two sessions, is expected to drop further as traders come to grips with minimal volume and what they call an alarming lack of new investment. The DAX index closed at 2,158.77, down 39.95 points, or 1.82%.
Stocks in Tokyo, by contrast, had a decent session after investors were encouraged by a compromise in U.S.-Japanese trade talks. The 225-share Nikkei average finished up 41.51 points at 20,663.63.
In Hong Kong, shares closed modestly higher as afternoon profit taking trimmed steep early gains from positive news on Hong Kong's airport project. But the Australian share market closed sharply lower as local confidence took a battering amid weakness in the gold, banking and resource sectors. The All Ordinaries closed down 26.5 points at 2105.9.
South African shares drifted lower as the market reacted to a lower gold price.