Stocks Rally; Dollar Rises Past 140 Yen

From Times Wire Services

The U.S. dollar topped the psychologically important 140 yen level Monday amid continuing concern over the future of Japan’s economic recovery.

On Wall Street, meanwhile, stocks rose and bonds held mostly steady ahead of the release of key economic data and of a speech by Federal Reserve Board Chairman Alan Greenspan later in the week.

Although many on Wall Street believe stocks’ recent pullback has run its course, news of a huge banking merger initially sent blue chips sharply higher but failed to ignite a broad market rally in the way similar deals have in the past.

The Dow Jones industrial average ended the session up 31.89 points at 9,069.60.


The broad market extended Friday’s gains, however, although beleaguered technology stocks fell back after a two-session rebound.

The Standard & Poor’s 500 rose 1.86 points to 1,115.72, about 15 points from April 22’s record of 1,130.54.

The technology-heavy Nasdaq composite index rose 4.85 points to 1,787.77, about 30 points from record terrain.

“There are a lot of pushes and pulls, and folks are not sure how enthusiastic they should be,” said Henry Herrmann, chief investment officer at Waddell & Reed.


Wells Fargo and Norwest said they will merge in a $32-billion deal to create a banking giant. The stock-swap marriage would create a banking giant with $191 billion in assets, and reaching from California to the Midwest.

With that, the latest in a series of big merger announcements that began two months ago with the Citicorp-Travelers Group deal, takeover speculation heated up again, with financial shares accounting for nearly all of the Dow’s gain. American Express jumped $4.50 to $109 after Norwest and Wells announced their merger.

Travelers rose 50 cents to $64.88, and J.P. Morgan, another frequent focal point of recent speculation, rose $1.31 to $123.69.

Merck, up $1.94 at $121.50, was the Dow’s second-biggest gainer.


Wells shareholders will get 10 Norwest shares for every one Wells share. Wells rose $2.25 at $365.75, and Norwest fell $2.88 to $36.81.

The dollar topped 140 yen for the first time since June 1991 as investors grew more confident that the major industrial powers would not agree to assist Japan support its currency.

Overnight, Japanese Vice Finance Minister Koji Tanami said the U.S. and Japan had agreed to cooperate on excessive yen falls.

The dollar rose as high as 140.79 Japanese yen, its strongest since June 19, 1991, when it traded at 141.20 yen. In late New York trading, it was at 140.71 yen, up from 139.75 yen late Friday in New York.


The yield on the benchmark 30-year Treasury bond was unchanged from Friday’s 5.78%.

“Greenspan is speaking on Wednesday, so no one wants to take a position before a seminal appearance like that,” said William Sullivan, senior vice president and chief money market economist at Morgan Stanley Dean Witter. “It’s a key event that held activity in check on Monday, and will do so on Tuesday and on Wednesday right up until the time he takes the podium.”

In commodities, crude oil prices fell as traders continued to look askance at the latest attempts by the Organization of Petroleum Exporting Countries and other world oil producers to restrain output.

At the New York Mercantile Exchange, crude oil for July delivery ended 52 cents lower at $14.55 a barrel.


On overseas exchanges, London’s FTSE-100 closed up 1.52%. Tokyo’s 225-share Nikkei average was down 0.19%, and Hong Kong’s Hang Seng index closed up 0.20%.