Dow Gains 60 as Week Ends Quietly
U.S. stocks on Friday rose as investors snapped up shares at some of the lowest prices in months, leaving behind for the moment concerns that an expected economic slowdown in Asia will dent corporate profits.
The Dow Jones industrial average gained 60.41 points to close at 7442.08. The average tumbled 6.3% in October, with the bulk of the retreat coming this week--the most tumultuous since the market crashed in October 1987.
That led investors to search through the rubble. Chevron, trading at its lowest in about eight weeks, led the Dow industrials higher.
The pendulum-like Dow eased from wild swings Monday and Tuesday to more restrained fluctuations as investors’ fears eased.
“Once you’ve taken a big knock, you don’t lose that fear overnight,” said Ronald J. Hill, investment strategist at Brown Bros. Harriman & Co. “It’s like a healing process. Once you get centered on the fact that the fundamentals remain positive, we would expect to see new highs in equities” by year’s end.
Volume on the floor of the Big Board came to 629.02 million shares, down from 707.84 million in the previous session and below the 1.2-billion record set Tuesday.
Broad-market indexes also rallied at the opening bell, but weakened somewhat as the day progressed. The Nasdaq Stock Market, battered recently from a sell-off in technology stocks, rose Friday.
As the week drew to a close, the Dow was down nearly 275 points for the week and up more than 15% for the year. Nevertheless, many investors feared a new trigger could set the market’s gyrations in motion again.
“There’s still a lot of jitters out there, which is causing volatility,” said Brian Belski, technical analyst at Dain Bosworth in Minneapolis. “You don’t have the huge moves we’ve seen this week and then just resume trading like nothing happened.”
Helping to calm global markets was a rise in major Asian indexes and European markets ending the day little changed. That followed a week of turmoil in international markets, caused by concerns over the financial outlook of Asia, sparked by currency concerns in Hong Kong.
At the end of a week dominated by Asian concerns, traders were greeted by the leader of Hong Kong’s parent, China. Jiang Zemin, China’s president, rang the opening bell of the New York Stock Exchange, grinned broadly and shouted to the traders on the floor 20 feet below, “Good morning! I wish you good trading!”
Troubles abroad sent the Dow plunging 554 points Monday, its worst point drop ever. Stocks then rebounded Tuesday, with a 337-point gain, its biggest one-day rise in history. It rose a mere 8.35 points Wednesday, then fell 125 points Thursday.
Also boosting stocks Friday was news of an International Monetary Fund bailout package for Indonesia, with the United States joining the rescue effort with a commitment of its own.
In addition, a government estimate that the U.S. economy managed sound 3.5% growth in the third quarter, without stirring up inflation, helped lift stocks at the open. An inflation measure linked to the gross domestic product had its smallest rise since 1964.
Meanwhile, U.S. bond prices fell for the first time in three days as stocks rebounded, damping demand for the refuge of Treasury securities.
The decline rounded out the busiest trading week ever, as bonds rode a roller-coaster guided by the world’s turbulent stock markets. Investors piled into Treasuries whenever stocks tumbled, only to jump back out when they rose.
The benchmark 30-year bond fell, pushing its yield up to 6.14% from 6.13% on Thursday.
Advancing issues outnumbered decliners by a 7-to-3 margin on the New York Stock Exchange.
The Standard & Poor’s 500-stock list was up 10.94 points to 914.62, and the NYSE composite index was up 5.28 points to 481.14.
The Nasdaq composite index was up 23.20 points to 1,593.61.
The Russell 2,000 index, a benchmark of smaller shares, rose 4.60 points to 433.26, for a gain of 1%.
Investors said they used the last month’s decline to get back into higher-quality shares that had climbed out of reach.
“We’re using the opportunity to upgrade the portfolio,” said Chet Needelman of Palley-Needelman Asset Management in Newport Beach. “Some of the drugs and some of the banks look especially attractive.”
Among Friday’s highlights:
* Leading Dow gainers were Chevron, up $2.69 to $82.95; IBM, up $2.25 at $98.06; and Merck, up $1.75 at $89.75.
* Among pharmaceutical stocks, Warner-Lambert surged $5 to $143.38. Eli Lilly gained $1 to $67.
Overseas, Tokyo’s Nikkei stock average rose 0.6% Frankfurt’s DAX index was unchanged and London’s FTSE-100 rose 0.8%.
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Market Roundup, D4
