Stocks Climb Slightly as Global Worries Ease
Stocks edged higher Friday as the market steadied after Thursday’s sharp drop, shaking off worries that not enough is being done to prevent the economic crises abroad from worsening.
The Dow Jones industrial average closed 21.89 points higher at 7,895.66 after drifting through a busy but hardly volatile session. The Dow never rose more than 57 points during the day and never fell more than 46.
The gain left the Dow 12 points below where it began the year and 15.4% beneath its July 17 record high of 9,337.97. For the week, the barometer of 30 big companies gained 100.16.
Bond prices rose for a third day, capping a seventh week of gains. The yield on the benchmark 30-year Treasury bond fell to 5.14% from 5.18% on Thursday.
The dollar rose against the yen amid speculation that a plan to reform Japan’s banking system won’t soon revive the Japanese economy. The dollar rose to 132.60 yen from 132.18 on Thursday.
Oil prices rose 63 cents to $15.49 a barrel, the first close above $15 in four months, amid signs that another large storm may be brewing in the Gulf of Mexico, disrupting production.
On Wall Street, broader stock indicators posted modest gains, led by smaller-company shares, despite another sloppy day on foreign markets.
The Dow plunged 216 points Thursday, halting a four-session rally, as world markets tumbled in disappointment at the inaction of the Federal Reserve Board and other major central banks in responding to the global economic crisis.
Speaking to a congressional panel Wednesday, Fed Chairman Alan Greenspan made it clear that no multinational interest rate cut was in the works. The German central bank echoed that sentiment a day later, leaving its key lending rates unchanged.
On Friday, Procter & Gamble rose $2.13 to $68.94 and Chevron rose $1.88 to $83.38 as the Dow’s two biggest gainers, helping to offset losses from Caterpillar, down $2.50 to $40.25, and IBM, down $2.06 to $124.69.
The Standard & Poor’s 500 rose 1.22 points to 1,020.09, and the technology-heavy Nasdaq composite index rose 17.52 points to 1,663.77.
Advancing issues outnumbered decliners by a 7-4 margin on the New York Stock Exchange. New York volume totaled a hefty 795.68 million shares, mostly because Friday marked the quarterly expiration of stock-related options and futures contracts.
The Russell 2,000 index of smaller companies rose 7.96 points to 363.25, and the small-company-dominated American Stock Exchange composite index rose 5.91 points to 627.16. The NYSE composite index rose 1.23 points to 507.54.
In Asia, stocks fell 7.5% in the Philippines, 4.8% in Indonesia, 3% in Singapore and 1.7% in Hong Kong. In Europe, key stock indexes fell 1.5% in both London and Frankfurt.
Japanese stocks, however, rebounded 0.9% from Thursday’s 12-year low amid hopes that legislators will reach a compromise on banking reform in time for Prime Minister Keizo Obuchi’s visit to the United States next week.
Among Friday’s market highlights:
* Xylan fell $2.38 to $10.75, extending a five-day slide, amid concern that third-quarter profit will be hurt by slowing sales to its large distributors. The Calabasas-based company, which makes switches that link computers to corporate networks and the Internet, gets about 20% of its revenue from sales to French telephone equipment maker Alcatel, which issued a profit warning Thursday.
* Union Carbide, a Dow component, ended up 25 cents at $37.69 despite the chemical giant’s warning that its third-quarter profit will fall short of analysts’ estimates because of Asia’s economic crisis.
* Shell Transport & Trading lost $2.19 to $34.75 after its London-based parent, Royal Dutch/Shell Group, painted a bleak picture of business conditions and said it plans unspecified job cuts.
