Dow Carves Out 4th Straight Gain
U.S. stocks closed broadly higher Wednesday, lifting the Dow Jones industrial average to its fourth straight gain--the longest winning streak since before the market began its steep summer slide.
The Dow rose 65.39 points, or 0.8%, to 8,089.78, and most other indexes also gained.
The Dow now has risen 474.24 points, or 6.2%, over the last four sessions.
The market had advanced in the morning, then was hit by modest selling in the afternoon, as Federal Reserve Board Chairman Alan Greenspan testified on Capitol Hill.
Despite acknowledging serious strains in the global economy, Greenspan gave no signal of an imminent interest rate cut--disappointing some investors.
But stocks resurged in the final hour, after President Clinton, answering reporters’ questions, said he has no plans to resign.
Computerized program buying also lifted stocks in the last hour, traders said.
In the broad market, the Standard & Poor’s 500 index rose 0.8%, while the Nasdaq composite gained 0.7%. The Russell 2,000 index of smaller stocks added 0.6%.
Breadth was positive, with winners topping losers by 18 to 12 on the New York Stock Exchange and by 18 to 15 on Nasdaq.
Although Greenspan made no promise of a rate cut, the bond market rallied anyway--and that may have helped stocks, analysts said.
Greenspan indicated that he still saw considerable risk of deflation in the world economy. That, too, could give investors more impetus to buy bonds.
The 30-year Treasury bond yield fell to 5.22% from 5.26% on Tuesday.
“Even though Greenspan didn’t hint about an easing, people expect lower rates--and that certainly would be a positive for equities,” said Joseph DeMarco, trader at HSBC Asset Management.
Meanwhile, in foreign trading, Latin American markets eased after stunning gains Tuesday, on talk of a financial support package from Western nations. Brazil’s main index slipped 2.1% after soaring almost 19% on Tuesday.
Mexico’s market was closed for a holiday.
Wall Street seemed unfazed by another plunge in the Russian ruble, which came on new political worries in that country.
Among Wednesday’s highlights:
* Financial stocks continued to rebound from their recent drubbing. Brokerage Charles Schwab led the gains, up $3.38 to $40.56, after saying that active trading by its customers will boost current-quarter earnings.
Bank stocks were strong, including NationsBank, up $2.19 to $59; Banc One, up $2.50 to $47.75; and Bankers Trust, up $3.31 to $68.13.
* Utilities also advanced. The Dow utilities index gained 0.9%.
* Dow component Eastman Kodak jumped $2.94 to $84.75 after Prudential Securities said a weakening dollar will help multinational companies’ earnings in the fourth quarter.
But the dollar, which has been sinking against the Japanese yen, advanced Wednesday, rising 1 yen to 134.90.
* Among other multinationals, Gillette slumped $4.81 to $40.19. It warned of weak sales near-term because of global economic turmoil.
Other consumer products names declining included Colgate-Palmolive, off $1.69 to $72.50, and Clorox, down $5.31 to $87.25.
* Reader’s Digest rose $1.81 to $19.94 after the publisher said it will cut up to $350 million in costs over the next three years in an attempt to boost sagging profit. The firm also plans to gain $200 million by selling parts of its valuable art collection.
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Market Roundup, D7
