FINANCIAL MARKETS : After-Hours Trading Puts Buck Below 85
The dollar plunged below 85 Japanese yen Thursday for the first time ever in after-hours U.S. trading, the latest in a spree of record lows, amid diminishing expectations of higher U.S. interest rates.
Blue-chip stocks crept up to the week’s second record closing high, despite a selloff in oil stocks and jitters before today’s employment report, while bond yields moved lower.
Currency traders said U.S. employment figures were expected to show that the U.S. economy is softening, which would probably discourage the Federal Reserve Board from raising rates for the eighth time since February, 1994.
Higher rates help slow the economy and stem inflation, in addition to making dollar-denominated holdings more attractive.
Meanwhile, the dollar moved higher against the German mark amid speculation that the Fed would intervene for the third time this week to help boost the U.S. currency. But there was no sign of intervention by late Thursday, which contributed to another selloff in yen.
At the close, the dollar fetched 85.40 yen in New York, down from 86.04 yen on Wednesday. In after-hours trading--a stretch of about two hours between the time the U.S. market closes and the Japanese market opens--dealers said the dollar fell to 84.80 yen, its first postwar drop below 85.
The U.S. currency also closed at 1.376 German marks, up from 1.373 on Wednesday.
Meanwhile, stocks eked out modest gains Thursday, with the Dow Jones industrial average propelled to another record high by mounting enthusiasm about corporate takeover activity.
The Dow finished 4.84 points higher at 4,205.41, inching past its record high of 4,201.61 set Tuesday. It marked the 16th time the blue-chip index has set a closing high since Feb. 15.
In the broader market, advancing issues beat decliners by about 10 to 9 on the New York Stock Exchange, with 320.47 million shares changing hands, up from Wednesday’s 317.56 million.
Among other market indexes, the NYSE’s composite index rose 0.30 point to 273.78. The Standard & Poor’s 500-stock index added 0.51 point to 506.08. Both indexes broke through record highs set Wednesday.
The Nasdaq composite index of mostly smaller issues declined 2.52 points to 813.80, but the American Stock Exchange’s market value index climbed 1.02 points to 468.87.
The slow-economy thesis was supported when the Commerce Department said housing completions fell 9.5% in February and chain stores released mostly weak sales figures for March.
Bond investors liked the signs of a weak economy, which diminishes the threat of inflation.
The Treasury’s benchmark 30-year bond yield fell to 7.34% from 7.36% on Wednesday. Its price, which rises when yields fall, rose 1/4 point, or $2.50 per $1,000 invested.
Among Thursday’s highlights:
* The nation’s retailers reported weak sales for March, which pushed that segment’s stock prices lower. Wal-Mart fell 5/8 to 25 3/8, Dayton Hudson dropped 2 1/4 to 68 3/4, Sears dipped 5/8 to 52 7/8 and Woolworth fell 1/2 to 18 3/4.
* Banking stocks moved aggressively higher, with Chase Manhattan soaring 3 5/8 to 41 5/8. Michael F. Price, president of Heine Securities Corp. of Short Hills, N.J., disclosed that he increased his investment to 6.1% of the Chase’s outstanding stock.
* Chemical Bank rose 1 3/4 to 41, while Citicorp rose 1 1/8 to 45 1/4.
* DuPont advanced 1 1/2 to 64 3/4 on the expectation that Seagram would announce it would sell its 24.2% DuPont stake back to the chemical maker in order to buy MCA. Seagram was down 3/4 at 27 7/8.
* Apple Computer also got a boost from a report that Canon is trying to buy Apple. Canon denied the story and analysts dismissed it, but Apple stock rose 2 to 36 3/4. Apple declined to comment.
Overseas markets were mixed, with Tokyo’s Nikkei 225-share average closing down 66.62 points at 15,815.87. In Frankfurt, the DAX 30-share average gained 9.43 points to 1,979.27, and London’s FTSE-100 average rose 10.7 points to 3,200.9.
Mexico’s Bolsa index closed 4.31 points lower at 1,914.78.
