FINANCIAL MARKETS : Stocks Mixed; Bond Yields Rise as Dollar Loses Steam : Wall Street: Blue chips are buoyed by year-end buying and the continuing chaos in Mexico.
The stock market ended on a mixed note Thursday, with the Dow Jones industrial average posting a moderate gain but most of the market weakening.
The dollar, which had been helped by the turmoil following Tuesday’s devaluation of the Mexican peso, lost steam, and Treasury bond yields were marginally higher.
Blue-chip stocks finished higher, buoyed by year-end buying and a flow of funds fleeing the chaos in Latin American markets. The Dow advanced 13.12 points to close at 3,814.92. It had been up about 26 points earlier in the day.
Traders bought into a long-awaited year-end rally early in the session, reluctant to miss out on any potential gains, said Richard Meyer, head equity trader at Ladenburg, Thalmann & Co.
“But then they saw stocks reach levels they hadn’t seen in a long time, and they took profits,” he said.
Adding to the rally were investors who were pulling their money out of Mexico and returning it to U.S. securities, including stocks.
Consumer and economically sensitive stocks led the blue chips higher. Among the 30 Dow components, General Motors rose 1 1/4 to 39 1/8, Disney added 1 1/8 to 46, AlliedSignal gained 7/8 to 35 1/8 and AT&T; climbed 1 to 51 1/2.
Still, declining issues outnumbered advancers by about 100 issues on the New York Stock Exchange. Big Board volume was brisk at 339.67 million shares but down from Wednesday’s 378.8 million.
Broad market indexes were mixed, despite a firming in technology stocks for the second consecutive session.
The NYSE’s composite index fell 0.23 point to 250.71. The Standard & Poor’s 500-stock index rose 0.06 point to 459.67.
The Nasdaq composite index rose 2.22 points to 739.34. The American Stock Exchange’s market value index fell 0.41 point to 427.52.
In the bond market, meanwhile, short-term yields rose for the first time in a week as weak demand at an auction of five-year notes offset speculation that Mexico’s financial crisis could eventually boost U.S. bills and notes.
Yields on three-month Treasury bills rose to 5.59% from 5.55%. The key 30-year bond edged up to 7.85% from 7.84% on Wednesday, while its price, which moves in the opposite direction, closed down 1/32 point, or 31 cents per $1,000 in face value.
Elsewhere, the dollar closed at 1.575 German marks in New York trading, down from 1.579 on Wednesday. It also closed at 100.23 Japanese yen, down from 100.48.
Among Thursday’s highlights:
* Broderbund Software posted surprisingly strong first-quarter earnings, pushing its stock up 4 1/2 to 44 1/2 in Nasdaq trading and taking other software issues higher.
* Dell Computer gained 1 1/2 to 40 1/2, spurred by a Bear Stearns upgrade to “attractive” from “neutral.”
* Salick Health Care soared 5 3/8 to 34 5/8 on news that Zeneca Group plans to buy a 50% stake.
* U.S. bank stocks slid on worries that banks would lose money on their Latin American investments. Citicorp fell 2 to 41 1/4. Bank of Boston, which analysts said was also heavily extended in loans to Latin America, fell 3/4 to 26 3/4.
In foreign trading, Mexico’s Bolsa index shot up 102.59 points to 2,306.26 in a roller-coaster session after the government abandoned its system of exchange rate bands and let the peso plunge.
However, U.S. depositary shares of Mexican companies continued to plunge. Bellwether issue Telefonos de Mexico fell 4 3/8 to 40 5/8, Grupo Tribasa slid 2 3/4 to 19 5/8 and Grupo Televisa lost 3 5/8 to 32 3/8. Empresas ICA, Mexico’s largest construction company, skidded 3 to 20 1/8.
The weakness in Mexican stocks spread to other American Depositary Receipts from Latin America. YPF Sociedad, an oil and gas exploration company in Argentina, fell 3/8 to 21 1/4 on heavy NYSE volume.
Overseas stock markets were stronger. Tokyo’s 225-share Nikkei average closed up 292.86 points at 19,633.53. London’s Financial Times 100-share average finished 21.3 points higher at 3,091.7, and Frankfurt’s 30-share DAX average gained 13.99 points to close 2,100.65.
DAILY DIARY
Dow Jones Industrials High: 3,850.59 Close: 3,814.92 Low: 3,780.61
New York Volume: 340.33 million shares
Interest Rates 30-year T-Bond: 7.85% 1-year T-Bill: 7.15%
Market Roundup, D6
