Financial Markets : Dollar Spurts Ahead, but Wall Street’s Not Impressed
In its biggest single advance in 20 months, the dollar surged more than 2% against the Japanese yen in domestic trading Wednesday, buoyed by a call from the United States and other leading industrial nations for a stronger U.S. currency.
But stocks were mixed as Wall Street investors doubted that the dollar could sustain its recovery, and bonds were little changed as the market shrugged off an unexpected rise in March orders for durable goods.
Finance ministers and central bankers issued a statement Tuesday evening that pledged to continue economic cooperation efforts that would stabilize currency markets. They deplored the dollar’s depreciation against the yen and German mark this year, a strong sign that more aggressive counteraction might be planned.
At the close in New York, the dollar was quoted at 83.78 yen, up from 81.93 on Tuesday--the largest advance since mid-August, 1993.
However, the greenback fell against the mark, trading at 1.368 marks from 1.371 on Tuesday.
The U.S. currency retreated from its highs after finance officials at the opening session of the International Monetary Fund said mere words would not be enough to boost the dollar.
On Wall Street, the Dow Jones industrial average recovered from a morning slump of nearly 17 points to close at 4,299.83, down 0.34 point.
But broader market indexes rose. The Nasdaq composite climbed 4.64 points to 835.92, breaking its record high set April 13. The NYSE’s composite index added 0.10 point to close at 276.49, and the Standard & Poor’s 500-stock index rose 0.51 point to 512.66.
The strength was concentrated in big-name issues. Advancing issues barely edged out decliners on the New York Stock Exchange by 1,155 to 1,079. Big Board volume was moderately heavy at 352.67 million shares, down from 352.25 million on Tuesday.
In the bond market, long-term yields retreated in the afternoon from a rise caused by the unexpected jump in durable goods orders.
The market recovered somewhat after five-year notes were auctioned, which followed the successful sale of two-year notes Tuesday.
The yield on the five-year notes was 6.82%, down from 6.99% at the last auction March 29.
At the close, the yield on the benchmark 30-year bond had fallen to 7.32% from 7.33% on Tuesday. Its price, which moves inversely to the yield, rose 1/8 point, or $1.25 per $1,000 in face value.
Among Wednesday’s highlights:
* Intel rose sharply, briefly touching the 100 mark before ending at 99 5/8, up 1 3/8. Other computer issues followed suit, boosting broad market indexes.
* IBM gained 1 5/8 to 95 1/4 after S.G. Warburg upgraded the issue.
* National Semiconductor rallied 2 1/8 to 22 7/8 and Apple rose 1/2 point to close at 38 1/4.
* Texas Instruments rose 4 1/4 to 105 1/4 and Motorola added 1 3/4 to 57 5/8.
* Chrysler fell 2 5/8 to 41 1/2 on speculation that billionaire investor Kirk Kerkorian will not be able to raise the financing necessary for his hostile takeover bid.
* Reader’s Digest tumbled 7 7/8 to 39 7/8 after it warned of a slowdown in earnings growth.
* Glenayre Technologies shot up 6 1/2 to 57 after its quarterly earnings came in well ahead of analysts’ expectations.
* U.S. Robotics rallied 10 1/4 to 79 after analysts raised their profit forecasts for the company.
* Positive Response Television fell 4 1/8 to 8 1/8 after the infomercial producer said an unexpectedly high return rate on its Perfect Hair product wiped out its first-quarter profit.
* Telefonos de Mexico rose 1 to 31 1/2 and Grupo Tribasa added 1 1/8 to 9.
Overseas markets were mostly higher. Tokyo’s 225-share Nikkei share average shed 84.05 points to close at 16,826.49.
In Europe, Frankfurt’s 30-share DAX average closed up 22.54 points at 2,029.53, while London’s FTSE-100 average rose 11.3 points to end at 3,226.2.
In Mexico, the Bolsa index rose 5.83 points to close at 2,006.98.
Market Roundup, D8
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Greenback Rallies
The dollar made its biggest gain in 20 months against the Japanese yen Wednesday after leading industrial nations called for a stronger U.S. currency. The dollar in yen, weekly closes since June, 1994, except latest:
Wednesday, April 27, 1995: 83.78
Source: TradeLine
Interest Rates:
30-year T-Bond: 7.32%
1-year T-Bill: 6.18%
