MARKET: Stocks Slip Along With Hopes for Ailing Dollar : FINANCIAL MARKETS : Dollar Slides Awaiting G-7; Stocks Mixed
The dollar dropped in New York Tuesday amid doubts that the Group of Seven industrial nations would put together a meaningful plan to shore up the currency.
Meanwhile, stocks closed mixed as bond yields rose modestly, responding in part to an upbeat consumer confidence report that hinted at a stronger economy. The Dow Jones industrial average was off 3.81 points at 4,300.17 from Monday’s record high.
Currency traders, awaiting the G-7 meeting communique that came after markets closed, pushed the dollar to 81.93 Japanese yen in New York, down from 83.03 on Monday. The dollar also eased against the German mark.
The G-7 finance ministers failed to offer much more than lip service to the anemic dollar. Given the differences of opinion among G-7 nations about recent currency swings, traders said, the general statement of support for the dollar was about all they could expect.
Wall Street, which has largely ignored the dollar’s travails this year, did so again on Tuesday. The mild profit taking in blue chips was overdue, many analysts said.
And while the Dow industrials slipped, rising stocks still outnumbered losers on the New York Stock Exchange by a thin margin. In the Nasdaq market of mostly smaller stocks, the composite index edged higher, adding 2.37 points to 831.28 as many technology stocks surged anew.
The bond market’s action may have troubled some stock investors, however. Yields inched up after the Conference Board’s monthly assessment of consumer confidence showed that Americans have become significantly more optimistic.
The yield on the Treasury’s 30-year bond rose to 7.33% on Tuesday from a 10-month low of 7.30% on Monday. However, the government’s auction of new two-year notes went well Tuesday, producing an average yield of 6.52%, the lowest since August.
Stronger economic data could toss a wrench into the bond market rally, in turn hurting stocks by reviving fears of higher interest rates. However, analysts noted that bonds’ reaction was barely a blip Tuesday.
Among Tuesday’s highlights:
* Airline stocks surged on continued optimism about earnings. United Airlines parent UAL jumped 2 7/8 to 117 1/2 on its profit report, Northwest gained 1 7/8 to 28 3/8 and Delta added 1 3/4 to 61 1/4.
* Tech issues up sharply included Intel, up 1 7/8 to 98 1/4; Adobe, up 2 5/8 to 56 1/8; Dell, up 2 3/4 to 52 1/8, and Motorola, up 1 5/8 to 55 7/8.
* On the downside, some steel stocks were weak. Bethlehem fell 3/4 to 14 3/4, Inland lost 7/8 to 26 3/4 and Nucor was off 2 1/2 to 48 1/2.
Overseas, Tokyo’s 225-share Nikkei average rose 106.49 points to 16,910.54. Major European markets were also higher.
Market Roundup, D10
