FINANCIAL MARKETS : Blue Chips Rebound From Selloff
The stock market recovered its poise Tuesday after the previous session’s selloff, but buyers confined their interest mainly to big-name companies.
Several widely watched Wall Street indicators finished modestly higher, but the broad range of stocks had a mixed session.
The Dow Jones industrial average, which established closing re*ords twice last week before surrendering nearly 34 points on Friday, rose 10.43 points to 3,963.97. The New York Stock Exchange composite index edged up 0.15 point to 261.98, and Standard & Poor’s 500 stock index rose 0.77 points to 482.74.
However, the Nasdaq Stock Market composite index skidded 2.35 points to 784.61.
Losers led the NYSE tally at the close with 1,180 stocks falling and 1,072 rising.
The Big Board’s floor came to 309.05 million shares, compared to 354.62 million Friday. Financial markets were closed Monday for Presidents Day.
Market analysts were relieved that stocks fared as well as they did given Friday’s setback.
“I think we got a little scare on Friday with that selloff,” said Bill Allyn, director of equity trading at Jefferies & Co. “In view of that, the market made a good account of itself.”
Treasury bond yields, meanwhile, rose for a third consecutive session as traders anticipated note auctions this week and coming testimony by Federal Reserve Board Chairman Alan Greenspan. Greenspan is expected to shed some light on the central bank’s opinion as to whether further rate increases are needed to keep inflation under control.
The plunge in the dollar against the German mark also boosted bond yields higher. But trading volume was described as extremely low, with outside factors having only a minor impact. Many investors apparently extended the three-day holiday weekend break.
By day’s end, the Treasury’s main 30-year bond yield rose to 7.60% from 7.58%. Its price, which moves in the opposite direction, was down 7/32 point, or $2.19 per $1,000 in face value.
The dollar was shaken again by Mexico’s financial problems, closing in New York at 1.470 German marks, down from 1.489 marks on Friday. It also fell against the Japanese yen, closing at 97.10 yen, down from 97.25 Friday.
The Mexican peso closed down 4 centavos at 5.55 to 5.63 pesos to the dollar.
Among Tuesday’s highlights:
* Telefonos de Mexico dropped 1 to 29, and media conglomerate Televisa lost 1 1/4 to 17 5/8.
* Shawmut National jumped 4 3/8 to 25 in response to the announcement that Fleet Financial Group will acquire the bank for $3.7 billion in stock. Fleet fell 3 1/4 to 30 3/8 and also was active.
* Do-it-yourself retailer Home Depot tumbled 2 to 46 5/8 after its earnings failed to impress Wall Street.
* Tobacco stocks felt the heat from unfavorable legal actions. A ruling by a federal judge on Friday cleared the way for the first national class-action lawsuit seeking damages on behalf of U.S. smokers. Philip Morris dropped 2 3/8 to 57 7/8, RJR Nabisco Holdings fell 1/4 to 5 3/8 and American Brands shed 1/2 to 37.
* Dell Computer ended 1 1/4 lower to 44 1/2 despite posting record quarterly profits.
Overseas markets were mixed Tuesday. Mexico’s Bolsa index ended at a 19-month closing low of 1,679.19, down 86.95 points.
In Tokyo, the 225-share Nikkei average ended up 139.77 points at 18,096.25. Frankfurt’s 30-share DAX average lost 4.50 points to close at 2,097.04, and London’s benchmark Financial Times 100-share average closed up 4.8 points at 3,023.4 points.
