FINANCIAL MARKETS : Dow Rises as Market Awaits News on June Jobs
Blue chip stocks rose for the fourth straight day Thursday while bonds held steady, on expectations that June employment figures due out today will be weak enough to hold off another interest rate hike by the Federal Reserve Board.
The Dow Jones industrial average climbed 13.92 points to 3,688.42, and the broad market joined in the mini-rally: Winners topped losers by a solid 3 to 2 on the New York Stock Exchange, as trading volume picked up to 259.7 million shares.
The Nasdaq Stock Market composite index of mostly smaller companies rose 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.
The bond market neither helped nor hurt stocks Thursday. Bonds languished through a listless session, as traders treaded cautiously ahead of the release of monthly employment statistics. The key 30-year Treasury bond’s yield was nudged up to 7.60% from Wednesday’s 7.59%.
The Fed held policy meetings Tuesday and Wednesday and apparently decided to leave short-term interest rates unchanged for now. Even so, market players were mulling the potential for a negative surprise in the June economic report today.
Matthew Alexy, a market strategist at CS First Boston Corp., tied some of Thursday’s caution in the bond market to some traders gambling on better-than-expected job growth figures for June.
Most economists believe the economy gained about 285,000 jobs last month but that unemployment edged up to 6.2% from 6% in May.
Investors will also be watching for developments from the weekend conference 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 in relation to other major currencies and how it might influence economic policies. Group of Seven members are the United States, Japan, Germany, Britain, France, Canada and Italy.
The dollar continued to fall Thursday against the Japanese yen, as participants in the G-7 summit indicated that a combined effort to support the greenback is unlikely.
In New York, the dollar eased to 98.75 yen from 98.95 yen Wednesday. The dollar also closed at 1.575 German marks, up from 1.569.
Among the stock market highlights:
* 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.
* Other retailers did not fare as well. J.C. Penney dropped 2 5/8 to 48 1/2. It reported a same-store sales jump 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 tumbled 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.
* In the energy group, Phillips Petroleum fell 1 1/4 to 31 7/8 after it reported disappointing results from the closely watched Teak sub-salt oil field in the Gulf of Mexico, of which it owns 50%.
Anadarko Petroleum, which owns the other 50% of the Teak well, tumbled 6 5/8 to 50 1/4.
* Among rebounding technology shares were some recently hammered computer networking stocks. 3Com rose 2 3/4 to 48 1/2; Wellfleet Communications advanced 1 3/16 to 20 3/8.
Software company Gupta fell 1 to 8 3/4 after it said it would probably lose 45 to 55 cents a share in the second quarter.
* Steel stocks were mostly higher, led by Inland Steel, up 1 to 36 1/4. Inland announced a price hike that is expected to be followed by other steelmakers. Bethlehem Steel rose 1 1/8 to 20.
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 rallied for a second day, finishing 24.40 points higher at 2,334.39.
Market Roundup, D5
