Dow Up 26, but Caution Reigns Before Jobs Data
Blue-chip stocks ended higher Thursday, buoyed by upbeat reports on retail sales for January, but the mood on Wall Street was cautious ahead of Friday’s report on January jobs data.
The Dow Jones industrial average rose 26.16 points to close at 6,773.06, having surrendered an early 20-point gain before slipping to a loss of 33 points in the early afternoon.
Broader market measures meandered to a mixed finish, hovering near Wednesday’s closing levels.
Indexes of blue-chip and larger-company issues outperformed those dominated by technology shares, many of which extended Wednesday’s sell-off as investors moved to secure more profits from January’s impressive advance. The Nasdaq composite index fell 2.04 points to 1,346.40. The Standard & Poor’s 500-stock list, which slid 11 points Wednesday, rose 1.87 points to 780.15.
Dow component Sears Roebuck jumped 1 3/8 to 49 7/8 after reporting strong sales in January. Analysts said apparel stores reported standout results, with chain stores and key department stores posting strong numbers.
Gap shares rose 2 3/8 to 32 1/4, Limited gained 1/4 to 17 3/8 and Wal-Mart rose 1/2 to 23 5/8.
Intel--which plunged 7 1/4 points Wednesday after several downgrades were prompted by doubts it could sustain its surprisingly quick start to 1997--fell an additional 4 5/16 to 152 15/16. It was the most active issue in Thursday’s dealings on the technology-laden Nasdaq. Microsoft also gave back more of this year’s surprising gains, falling 1 1/4 to 97 1/8 in active Nasdaq trading. However, Cisco Systems gained 7/8 to 63 7/8 and Gateway 2000 added 1 3/4 to 57 1/4.
Despite the continued selling Thursday, analysts said there are few signs that the high-flying technology group had entered a bearish phase.
Among Thursday’s highlights:
* For the fourth straight session, IBM weighed down the Dow average, falling 2 3/8 to 146. Since its disappointing earnings report Jan. 21, the computer giant has seen its shares plunge 22 points--or the equivalent of more than 65 Dow points--from a nine-year high of 168.
* The Dow’s biggest gainers were Procter & Gamble, up 2 3/4 to 119 5/8; DuPont, up 2 3/4 to 111 3/4; J.P. Morgan, up 2 3/8 to 103 1/4; and Merck, up 2 1/8 to 92.
* Dean Witter Discover added 1/2 at 41 1/8 and Morgan Stanley Group gained 1 1/4 to 66 1/2 one day after the companies announced an agreement to merge.
* America Online closed unchanged at 38 1/8. The service reported it lost $154.8 million in the last quarter of 1996.
* Manpower surged 5 5/8 at 35 5/8 as the Milwaukee-based staffing services provider reported fourth-quarter earnings above analysts’ expectations.
* USA Detergents plunged 13 7/8 at 20 3/8 after the cleaning-products concern warned that it does not expect fourth-quarter revenue and profit to meet expectations.
* Pete’s Brewing shares fell 13/16 to a record low of 5 1/8 after the Palo Alto-based craft-beer brewer compounded investors’ worries with a forecast of lower first-quarter earnings and no growth in shipments.
Overseas, Tokyo’s Nikkei stock average fell 0.8%, Frankfurt’s DAX index rose 0.2% and London’s FTSE-100 fell 0.4%.
The dollar hit a four-year high against the yen and a 2 1/2-year high against the mark on news of record German joblessness and optimism that the Group of Seven weekend summit won’t halt the U.S. currency’s rally.
The dollar reached an intraday high of 123.99 yen, the strongest since February 1993, before settling in New York at 123.54 yen, up from 123.25 on Wednesday and up 6.6% for the first five weeks of 1997.
The dollar reached an intraday high of 1.6547 marks, the strongest since June 1994, before settling in New York at 1.6504, up from 1.6454 and up 7.1% for the first five weeks of the year.
Coffee prices rallied Thursday to 17-month highs on expectations that supplies will remain tight because of a smaller crop in leading producer Brazil.
