FINANCIAL MARKETS : Stocks Mixed, Rates Rise; Investors Fear Jobs Report
Stocks finished on a mixed note Thursday as bond yields inched up ahead of today’s report on December employment.
The Dow Jones industrial average eased 6.73 points to 3,850.92, reversing direction after rising for three consecutive sessions.
Still, advancing issues outnumbered decliners by 1,156 to 1,076 on the New York Stock Exchange in active trading. And transportation stocks--often a market bellwether--continued to rally.
In the bond market, yields were modestly higher after the government reported surprising strength in factory orders in November, and as traders positioned themselves for today’s jobs report--the first important look at December economic trends.
A stronger-than-expected gain in December employment could cement market expectations that the Federal Reserve Board will raise short-term interest rates again this month to slow the economy.
Thursday, the yield on the 30-year Treasury bond rose to 7.88% from 7.85% on Wednesday, continuing its seesaw pattern of recent weeks.
Bonds were also weighed down as profit takers halted the dollar’s recent rally. The dollar closed in New York at 1.551 German marks, down from 1.559 on Wednesday, and at 100.93 Japanese yen, down from 101.35.
Some analysts on Wall Street are worried about the stock market’s vulnerability, as nervousness increases. Robert Stovall, analyst at Stovall/Twenty-First Advisers in New York, noted that the market is already concerned about the conflict in Russia, the Mexican peso crisis and the political outlook in Washington as the Republicans take over Congress.
Among Thursday’s highlights:
* Consumer growth stocks led the Dow lower, as profit takers hit some of the stocks. Philip Morris dropped 1 3/8 to 57 1/2 as news spread of unfavorable decisions by a judge considering a well-financed lawsuit against tobacco companies.
U.S. District Judge Okla Jones rejected defense requests to have an appeals court review rulings by Jones’ predecessor in the New Orleans tobacco lawsuit.
* Other consumer stocks losing ground, unrelated to Philip Morris, included Colgate Palmolive, down 2 at 60 1/8; Procter & Gamble, off 7/8 at 61, and Gillette, off 1 1/8 at 72 5/8. Many of those stocks were market leaders in 1994.
* On the plus side, many transportation stocks continued to rally. AMR, parent of American Airlines, rose 1 1/8 to 56 1/8, rail giant CSX gained 3/4 to 72 3/8 and Federal Express was up 5/8 at 60 7/8.
* Retail stocks were active. Sports Authority fell 2 7/8 to 16 7/8 after reporting a rise of only 2% in December sales at stores open at least a year, and Tiffany sank 5 7/8 to 34 1/8 after reporting disappointing December sales in Japan.
Children’s clothing retailer Gymboree plummeted 4 to 23 after reporting disappointing sales.
Among retailers gaining on December sales news were Mercantile Stores, up 1 1/8 at 41, and Dayton Hudson, up 1 1/8 at 71.
* Takeover speculation boosted Kemper again. Financial columnist Dan Dorfman said on CNBC-TV that there were rumors of a $50-a-share bid coming. Kemper rose 1 3/4 to 41 1/4.
* Biotech firm Amgen rose 1 7/16 to 60 after brokerage Gruntal recommended the stock.
* In Mexico City, the Bolsa index inched up 3.23 points to 2,273.10 after Mexico’s new finance minister, Guillermo Ortiz, met with investors in New York to try to shore up market confidence in that country’s economic recovery plan.
Among U.S.-traded Mexican shares, Telmex eased 1/8 to 38, Grupo Tribasa was down 1 1/8 at 13 1/8, Grupo Televisa was unchanged at 28 5/8 and the Mexico Fund eased 3/8 to 20 1/2.
In other foreign markets, Tokyo stocks extended their New Year downward trend, with the Nikkei-225 average closing down 67.93 points at 19,616.11.
In Frankfurt, the DAX 30 index eased 9.78 points to 2,062.48, and London’s FTSE-100 index sank 19.3 points to 3,032.3.
In commodities markets, precious metals prices rebounded after Wednesday’s selloff.
February gold futures rose $1.30 to $376.60 an ounce on the Comex, and March silver added 9.7 cents to $4.73.
