Bargain Hunters Push Stocks Slightly Higher
Stocks ended slightly higher Thursday, boosted by bargain hunting after the previous day’s sharp fall.
The Dow Jones industrial average closed with a gain of 3.97 points at 5,630.85.
On Wednesday, the index tumbled 43 points as comments by Federal Reserve Board Chairman Alan Greenspan on the strength of the economy doused hopes of an imminent cut in interest rates.
In the broader market, declining issues led advancers 1,240 to 1,019 on moderate volume of 368 million shares on the New York Stock Exchange.
Analysts said stocks were dogged by lingering concerns about upcoming first-quarter corporate earnings. “It’s been a rudderless market for a few days. Investors and traders are waiting for quarterly earnings reports,” said Eugene Peroni, chief technical analyst at Janney Montgomery Scott.
Earlier in the day, the Dow Jones index lost more than 35 points on pressure from a second day of weakness in Treasury bonds, but stocks still managed to rebound.
The Nasdaq composite index rose 0.95 point to 1,094.83.
In the bond market, the yield on the key 30-year Treasury bond rose to 6.72% from 6.68% on Wednesday.
“With the bond market in a sloppy mood and the long bond knocking on a 6.75% yield, it will spell short-term trouble for the [stock] market,” said Peter Cardillo, director of research of Westfalia Investments.
Investors remained nervous about the slew of corporate earnings, which will start to pour in next month. “I think when all is said and done, earnings will be quite respectable and most companies will report on target,” Cardillo said.
Analysts were nonetheless impressed by the market’s late recovery.
“The market is holding up quite well given the weakness in bonds,” said Peter Green, a technical analyst at Gruntal & Co.
Weekly jobless claims came in a bit higher than expected, but analysts downplayed the negative implications for the economy because the strike at General Motors Corp. swelled the ranks of the unemployed.
The Labor Department said that claims for the week ended March 23 rose 43,000 to 429,000, the highest since July 1992.
Among the market highlights:
* The leading gainers among the Dow industrials included chemical maker DuPont and aluminum producer Alcoa. DuPont rose 1 to 82 1/4 and Alcoa rose 1 1/2 to 64 3/8. But other cyclicals slumped. Caterpillar fell 1 to 68 1/2 and IBM lost 1 3/8 to 109 7/8.
* Retail stocks were mixed. Sears fell 1 to 48 3/4 after the Chicago-based retailing giant recalled 150,000 table saws, including some sold under Sears’ Craftsman label, because of a possible defect in the switch lock. Kmart added 1/2 to 9 1/2 amid news that two unions are asking to appoint a representative to the troubled retailer’s board to help push for a merger, sale or other transaction to increase the company’s stock price.
Stop & Shop jumped 6 1/2 to 33 1/8 after Dutch food retailer Royal Ahold agreed to buy it for $33.50 a share in cash.
* British Telecommunications American depositary receipts gained 3 7/8 at 55. Cable & Wireless said it is again in talks with rival British Telecom. Cable & Wireless shares jumped 7% on the London Stock Exchange.
* Trimedyne rose 2 1/4 to 8 7/8 after the Irvine-based company received Food and Drug Administration clearance to market its OmniPulse Holmium pulsed laser and disposable fiber optic devices for use in ear, nose and throat surgery.
* Cabletron lost 3 3/4 to 65 3/4 after the company said its chief executive sold 1.3 million shares.
* Gold mining shares gave back recent gains as bullion prices retreated below the key $400 per ounce level. The leading June contract on New York’s Commodity Exchange closed at $399.70 an ounce, off $3.50. Newmont Mining fell 2 1/4 to 56 3/4 and Newmont Gold lost 1 1/2 to 56 1/4.
* Penske Motorsports, a leading promoter of professional motor sports, climbed 5 1/4 to 37 in its second day of trading. The stock jumped 7 3/4 on Wednesday.
In foreign markets, Tokyo’s Nikkei-225 average fell 34.16 points, or 0.16%, to 21,295.82.
