FINANCIAL MARKETS : Dow Manages Small Gain as Bulls and Bears Slug It Out
Wall Street’s bulls and bears dueled to a virtual draw Monday as stocks closed mixed and speculation continued about whether the Dow will reach the 4,000 plateau any time soon.
The Dow Jones industrial average rose modestly to 3,936.72, up 3.37 points, but other popular market measures lost ground. Losers outnumbered gainers about 5 to 4 on the New York Stock Exchange.
Stock trading settled down to a more normal pace after Friday’s hectic session when expirations of futures and options inflated volume to the sixth-highest total ever on the Big Board. Volume on the NYSE floor came to 272.80 million Monday, compared to 410.69 million Friday.
Stability in bonds failed to inspire much equity buying. The key 30-year Treasury bond yield dipped to 7.75% from 7.77% late Friday.
In currency markets, the Japanese yen gained broadly on expectations that U.S. trade data for July, due today, will show a widening of America’s deficit with Japan. The imbalance, which reached nearly $60 billion last year, is largely responsible for the U.S. currency’s persistent weakness, supplying a steady stream of Japanese-held dollars that must be exchanged for yen. In late New York trading, the dollar was quoted at 98.53 yen, down from 98.93 late Friday.
Analysts said events in Haiti are unlikely to develop into a major concern on world markets, but they said there was relief that an 11th-hour agreement avoided a U.S.-led invasion.
Mixed performances by foreign markets didn’t offer a consistent course. Prices rose in London, ended flat in Paris and fell in Frankfurt. In Tokyo, stocks sank to their lowest depths since April.
Some U.S. analysts see 4,000 as an elusive level for the Dow. “I think it’s going to be difficult for the Dow industrials to get through 4,000 for the balance of this year,” said Ricky Harrington, senior vice president and technical analyst at Interstate-Johnson Lane. “The market’s strength is very selective, confined to some tech stocks and big-cap blue chips.”
However, others see momentum. Jim Schroeder, market analyst at MMS International, said the market might soon break through the record mark, but it is unlikely to stay in uncharted territory for very long.
Oil prices rose sharply Monday on an unconfirmed report of civil unrest in Saudi Arabia, the world’s largest oil exporter. October crude oil jumped 38 cents to $17.21 a barrel.
The report about protests and arrests in the northern Saudi city of Buraida came from a London-based group of ex-patriot clerics and professionals who favor stricter adherence to Islamic law.
Among Monday’s market highlights:
* Time Warner jumped 1 3/8 to 37 5/8. The media-entertainment company’s stock attracted fresh attention after a published report in USA Today said General Electric, which is exploring the possibility of selling all or part of its NBC television division, is also considering an opposite strategy of buying Time Warner. GE fell 1/2 to 50 1/2.
* Earnings helped some individual stocks. Coca-Cola rose 1 1/4 to 49 after saying it expects strong third-quarter soft drink sales and a 25% increase in third-quarter earnings.
* Nike slipped 2 5/8 to 62 7/8 after reporting a drop in first-quarter earnings.
* ReLife Inc. leaped 5 5/32 to 23 5/16 on Nasdaq after Healthsouth Rehabilitation Corp. said it would buy ReLife in a $180-million stock swap. Healthsouth gained 1 1/4 to 37 3/4.
* Gold prices advanced. On New York’s Commodity Exchange, gold for current delivery gained 10 cents to $390 per troy ounce.
