Late rally lifts market Dow rises 24.05 points

September 03, 1992|By Hui-yong Yu | Hui-yong Yu,Bloomberg Business News

NEW YORK -- U.S. stocks closed higher yesterday as a rally in airline, aluminum and technology issues gathered steam late in the day.

After hovering about 5 points higher most of the day, the Dow Jones industrial average surged in afternoon trading to close up 24.05 points, at 3290.31. The rise was led by Aluminum Co. of America, International Paper and Minnesota Mining & Manufacturing.

Standard & Poor's 500 index rose 1.91, to 417.98, while the NASDAQ Composite index jumped 5.62, to 571.23.

Advancing issues outnumbered declining ones by a margin of 9-to-5 on the New York Stock Exchange. Trading was active for the first time in a week, with about 188 million shares changing hands on the Big Board.

"There really isn't any pressure to sell stocks," said Lon Gorman, managing director in charge of equity trading at First Boston. "We're drifting upward because there's no one around to do anything else. I imagine we'll do that the rest of the week, barring any collapse in the dollar."

Led by airlines, the Dow Jones transportation average rallied 29.70, to 1269.93, extending Tuesday's 18.97-point surge. Airline issues rebounded from depressed levels, spurred on by the industry's plans to raise fares and let discounts lapse.

Alcoa and Reynolds Metals benefited from reports of firm aluminum prices, traders said. A Kidder, Peabody analyst made positive comments about aluminum stocks yesterday, spotlighting Alcoa as the firm's top pick in the group.

Other analysts aren't so bullish. Although aluminum demand is up about 6 percent this year, inventories are surging because of imports from Russia, said Oppenheimer's Jordan Estra, who continues to view Alcoa shares as a "market performer."

Higher Treasury bond prices and continued strength in technology shares also helped stocks, traders said.

"The market was pretty flat all day, but then bonds came back. Maybe that's where the pressure was," said Thomas Callahan, senior vice president of U.S. equities at Yamaichi International (America).

"I don't see an awful lot of liquidity," said Mr. Callahan. "Airlines are doing better, but I don't see anything outstanding," he said, attributing the gain to the seasonal rally that usually precedes the Labor Day holiday.

Until the August employment statistics are released tomorrow, Friday, "we can do anything we darn well please," said Jack Solomon, technical analyst at Bear Stearns. "There's no pressure from sell programs."

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