Stocks Rise in Slow Trading; Copper Tumbles
Stocks closed mostly higher Monday, though trading was typically lethargic for a summer Monday session.
In commodities markets, copper prices fell to the lowest levels in two years as fresh worries about scandal-rocked Sumitomo Corp.’s huge holdings hit the market.
On Wall Street, the Dow industrials added 12.56 points to 5,717.79, the fourth straight advance for the blue-chip index. It had been up 35 points before retreating.
Buyers seemed to be concentrating on so-called defensive issues--mainly stable-growth consumer stocks--in the wake of the market’s recent rocky ride.
Among broader indexes, the battered Nasdaq composite index of mostly smaller stocks rose 7.46 points to 1,182.90, adding to Friday’s gain of 8.10 points. For all of last week, the index slumped nearly 38 points, or 3.1%, as profit takers slammed many formerly high-flying shares.
Winners topped losers by 13 to 10 on the New York Stock Exchange on Monday, on turnover of just 334 million shares. Winners had only a narrow edge over losers on Nasdaq.
Traders said many investors remain wary, especially of technology issues. Some tech companies helped trigger the market’s pullback of the last two weeks by warning of disappointing earnings in the current quarter because of weaker-than-expected demand.
In addition, some investors are nervous ahead of the Federal Reserve Board’s meeting next Tuesday. Despite the economy’s recent strength the Fed isn’t expected to raise interest rates, but that possibility remains.
Some of Monday’s market gains may have been technical “spillover” from Friday’s once-a-quarter expiration of stock index futures, index options and individual stock options. Such expirations can require traders to buy or sell stocks to roll over or close out complicated trades.
In the bond market, yields were little changed Monday ahead of today’s Treasury auction of two-year notes and Wednesday’s auction of five-year notes. The 30-year Treasury bond yield slipped to 7.08% from 7.09% on Friday. The yield has fluctuated between 7.07% and 7.13% since June 13.
In commodities trading, copper futures for July sank 1.9 cents to 89.3 cents a pound, a two-year low.
Prices plunged following a weekend report in London’s Financial Times that Sumitomo still has as much as 2 million tons of copper to sell, equal to about 20% of annual Western copper use.
The market was stunned June 13 by Sumitomo’s disclosure that a trader built up huge unauthorized positions in copper, apparently trying to corner the market.
Some experts doubted the Financial Times estimate of Sumitomo’s current position. That is “twice the figure we’ve been hearing,” said William O’Neill, head of futures research at Merrill Lynch.
Among Monday’s highlights:
* Consumer-growth stocks rising included Coca-Cola, up 1 1/8 to 48 3/4; Philip Morris, up 1 3/8 to 104 5/8; Procter & Gamble, up 3/4 to 91 1/2; Colgate-Palmolive, up 2 1/8 to 85 3/8; and Gillette, up 1 5/8 to 60 1/2.
* In the tech sector, semiconductor firm Cyrix plunged 5 3/4 to 16 after it said will post a second-quarter loss, blaming price competition. That was viewed as a sign that Cyrix is having severe problems competing with its chief rival, Intel. The latter soared 2 15/64 to 73 39/64.
* Bank stocks were stronger, recovering a bit from recent worries about credit card delinquencies. Wells Fargo rose 1 1/2 to 241 1/8, BankAmerica gained 1 1/8 to 74 1/4 and Citicorp added 1 1/8 to 81 5/8.
* ValuJet soared 1 5/16 to 8 15/16. Its chief executive said he is optimistic that the grounded airline can resume operations in 30 to 60 days.
In foreign trading, Tokyo shares edged up to 4 1/2-year highs, while Mexico City’s Bolsa index rallied from a sell-off to close off marginally, following better-than-expected June inflation data.
Market Roundup, D8
