Dow Gains Again, but Yields Up on Jobs Jitters
Stocks rose for the fourth straight day Thursday, while bond yields inched upward on expectations that June employment figures due out today will be weak enough to hold off an interest rate hike by the Federal Reserve Board.
Stocks advanced as investors overcame their uneasiness about interest rates, focusing on economically sensitive companies and recently depressed issues.
The Dow Jones industrial average climbed 13.92 points to 3,688.42 on Big Board volume of 259.74 million shares. In the broader market, gainers outpaced losers by about 3 to 2 on the New York Stock Exchange.
Broad market measures also finished higher, with the NYSE composite index rising 1.03 points to 247.57 and the Standard & Poor’s 500-stock index gaining 2.25 points to 448.38.
The Nasdaq Stock Market composite index of mostly smaller companies moved ahead 5.53 points to 706.53, helped by rebounding technology issues. The technology sector had been under pressure for several days since a merger announcement involving Wellfleet Communications and SynOptics Communications was poorly received.
Sales reports from the nation’s major retailers suggested that economic activity remained high in June. Industrywide, business was respectable for stores, but retailers that didn’t do as well as the majority witnessed a selloff in their stocks.
Stocks found nothing inspirational about the bond market’s performance. Bonds languished through a listless session, as traders treaded cautiously ahead of the release of monthly employment statistics. The key 30-year Treasury yield was nudged up to 7.60% from Wednesday’s 7.59%. Its price, which moves in the opposite direction, was off 1/8 point in late trading, or $1.25 per $1,000 in face value.
With the Fed’s apparent decision this week to leave short-term interest rates unchanged for now, market players were mulling the potential for a negative surprise in the June economic report.
Matthew Alexy, a market strategist at CS First Boston Corp., tied some of Thursday’s price drop to selling by traders anticipating an unexpected jump in June jobs growth.
Most economists believe the economy added about 285,000 jobs last month, with the unemployment rate edging up to 6.2% from 6% in May.
Investors will also be watching for developments from the weekend summit of leaders of the major industrial countries.
The so-called Group of Seven government leaders are meeting in Naples, Italy, where they are expected to discuss the dollar’s recent slump against other major currencies and what consequences it might have on economic policies.
The dollar continued to fall Thursday, as participants in the G-7 summit indicated that a combined effort to support the greenback is unlikely.
In New York, the U.S. currency fell to 98.75 Japanese yen from 98.95 yen Wednesday. The dollar closed at 1.575 German marks, up from 1.569.
Among the market highlights:
* Phillips Petroleum shed 1 1/4 to 31 7/8 after it reported disappointing results from the closely watched Teak sub-salt prospect, of which it owns 50%. Anadarko Petroleum, which owns the other 50%, tumbled 6 5/8 to 50 1/4.
* Some retail stocks bounced after reporting upbeat June sales figures. Dayton-Hudson rose 1 to 81 7/8, Wal-Mart gained 7/8 to 24 3/4 and Bon-Ton Stores added 1/4 to 9 7/8.
* Others did not fare as well. J.C. Penney dropped 2 5/8 to 48 1/2. It reported a same-store sales rise of 6.8%, but Wall Street had expected a bigger gain at both its stores and its catalogue business. Best Buy lost 3 1/4 to 25 3/8 and TJX lost 2 7/8 to 19 1/8. TJX warned Wall Street that its second-quarter net income will be lower than last year’s because sales in May and June were below expectations.
* Among rebounding technology shares were some recently hammered computer networking stocks. 3Com rose 2 3/4 to 48 1/2 and Wellfleet Communications advanced 1 3/16 to 20 3/8.
* But software company Gupta fell 1 to 8 3/4 after saying it would probably lose 45 to 55 cents a share in the second quarter.
Foreign markets were mixed. London stocks ended higher with the Financial Times 100-share average rallying strongly to end 17.7 points up at 2,964.4. In Frankfurt, the DAX-30 average closed at 2,043.85, up 8.15 points.
Tokyo’s 225-share Nikkei average finished off 9.01 points at 20,620.02.
In Mexico, the Bolsa index finished 24.40 points higher at 2,334.39.
Market Roundup, D5
