Blue Chips Continue in the Black
Blue-chip stocks recovered more ground Friday, chalking up their biggest weekly gain that erased nearly half of the recent 700-point slide by the Dow Jones industrial average.
Bonds also strengthened, but the dollar fell.
The Dow Jones industrial average ended 44.95 points higher at 6,703.55--gaining 311.86 points from last Friday’s close as the blue-chip market clawed back from a four-week sell-off of 700 points.
The weekly gain was the biggest ever for the 30-stock Dow, beating the 206-point surge in the week of Aug. 2 last year.
Broader measures posted modest gains, but one of the weakest showings came from the technology-heavy Nasdaq market, which failed to rally much despite a 10% surge by Microsoft.
Even as the Dow continued to undo the damage from its monthlong slide, analysts were reluctant to predict clear sailing for the market.
“Point for point, the statistics may show this was one of the best weeks for some of the averages,” said Scott Bleier, chief investment strategist at Prime Charter Ltd. “But this wasn’t a case where a rising tide lifted all the ships.”
With no major economic reports released Friday or the next few sessions, bond prices edged higher, lowering interest rates and providing some support for the stock market.
The yield on the 30-year Treasury bond fell to 7.05% from Thursday’s close of 7.06%.
Advancing issues outnumbered decliners by an 8-5 margin on the New York Stock Exchange in moderate trading.
The Standard & Poor’s 500-stock list rose 4.57 points to 766.34, and the NYSE’s composite index rose 1.99 points to 402.64.
The narrowness of the market’s rally was most evident among Nasdaq stocks, which managed to gain only 5.50 points to 1,222.57 despite Microsoft’s stellar 9 1/2 rally to 107 5/8.
Among Friday’s highlights:
* The Dow’s biggest gainer was Philip Morris, which rose 2 3/4 to 44 3/8 amid more optimism this week’s disclosure of negotiations to settle liability suits against the tobacco industry will produce a settlement.
Other tobacco issues also gained: RJR Nabisco Holdings, up 1 1/4 to 34; Loews, up 3 1/2 to 93 3/8; and UST, up 1/2 to 27 1/4.
* Microsoft’s strong earnings results released after close of market Thursday did little to bolster the technology sector. Intel fell 7/8 to 137 1/8, Cisco Systems fell 1 1/8 to 48 3/8 and Sun Microsystems fell 3/4 to 27 1/8.
Silicon Graphics fell 4 1/8 to 12 7/8 after reporting lower-than-expected quarterly results.
Remedy fell 4 to 26 1/2 on concern that help-desk software companies could show little revenue growth.
* Athletic shoe maker Reebok International tumbled 5 5/8 to 40 1/8 after reporting weak earnings. Rival Nike slid 2 to 52 1/8.
* Word of an impending first-quarter loss sent Mossimo Inc. tumbling 2 5/8 to 8 3/8. The Irvine-based apparel and accessories firm said it will probably report a net loss of about 3 cents a share.
In currency trading in New York, the dollar cost 125.88 Japanese yen, down from 126.05.
Overseas, Tokyo’s Nikkei stock average rose 1.4%, Frankfurt’s DAX index fell 1.1% and London’s FTSE-100 fell 0.3%.
Market Roundup, D4
