Dow Hits High as Oil Prices Leap on Talk of Output Cutback
Despite a sharp rebound in oil prices amid new talk of production cuts, the stock market closed broadly higher on Wednesday as blue chips hit records.
In the bond market, yields edged up, which traders said reflected a surge in corporate debt deals.
On Wall Street the Dow Jones industrials gained 79.08 points, or 0.8%, to a record 9,772.84, ending a two-day losing streak and eclipsing the previous high of 9,736.08 set on Friday.
The Standard & Poor’s 500 index also hit a new high, adding 7 points, or 0.6%, to 1,286.84.
In a bit of a surprise, the broad market also advanced--even as oil prices resurged.
Near-term crude oil futures leaped 84 cents, or 6.1%, to $14.69 a barrel on the New York Mercantile Exchange, the highest closing price since Oct. 7.
Oil rose as key exporters indicated they are close to cutting production to shore up prices. “There is an agreement” that will be reached between members of the Organization of Petroleum Exporting Countries and non-OPEC members, including Mexico, before an OPEC meeting March 23, a Saudi official said on condition of anonymity.
Qatar’s energy minister said Persian Gulf nations had agreed on “dramatic” output cuts to lift prices from recent 12-year lows.
The 30-stock Dow index was helped by gains in its two oil stocks--Exxon, up $3.38 to $73.51, and Chevron, up $3.31 to $83.25.
But there was plenty of buying in other stock groups Wednesday, including banks, Internet shares and biotech.
Overall, winners topped losers by a 17 to 13 margin on the New York Stock Exchange in active trading.
In the Nasdaq market the composite index rose 0.6% to 2,406.00 points despite declines in key tech stocks.
In the bond market the bellwether 30-year Treasury bond yield inched up to 5.55%, from 5.53% on Tuesday, a muted rise considering the possible inflation message in oil’s resurgence.
Traders said demand for Treasuries was mainly affected by competition from $6.6 billion in corporate bond offerings from companies ranging from Freddie Mac to Lucent Technologies.
Among Wednesday’s highlights:
* Energy stocks led the way, as Unocal soared $2.44 to $33.13, Halliburton leaped $4.19 to $36.44 and Transocean Offshore gained $3.19 to $25.56.
* DuPont, also a Dow stock, was a blue-chip winner, rising $3.81 to $57.38. The company said it would issue a separate stock to track the performance of its life sciences business and was seeking alliances with drug companies.
* The Internet sector was again red-hot as investment firm CMGI indicated it might bid for Lycos, foiling USA Networks’ bid. Lycos zoomed $13.75 to $110, Yahoo rose $6.31 to $173.63, Infoseek jumped $6.81 to $82.13 and Verticalnet soared $23.25 to $96.25.
Yet many large tech stocks fell after software giant Computer Associates was downgraded by Morgan Stanley, which cited concerns about weaker demand for computers. Computer Associates plunged $5.06 to $34.94. Also lower: Compaq, down $1.19 to $31.56; Dell, off 75 cents to $43.31; and Apple, down $1.56 to $32.56.
* Among Southland issues, Fluor plummeted $4.31 to $30 a day after the engineering firm announced a major restructuring.
In foreign trading Tokyo shares continued to rebound, with the Nikkei-225 index up 2.5% to 15,480 points.
Mexican stocks also streaked higher again, lifting the main index 3.5% to 4,728. In Brazil the stock market rose 3.1% as the country’s currency hit its best level against the dollar since Feb. 5, in the aftermath of a new bailout deal with the International Monetary Fund.
*
Market Roundup, C9
