U.S. stocks rally on good news for economy, Bush

WALL STREET

October 27, 1992|By Bloomberg Business News

NEW YORK -- U.S. stocks rallied yesterday on signs that the economy is improving at a faster-than-expected pace and reports that the presidential election race is tightening.

"Polls now show that [Democratic candidate Bill] Clinton isn't a sure bet to win this election," said Richard Ciardullo, director of trading at Eagle Asset Management. "The stock market likes the idea that President Bush still has a chance to win because the stock market likes the status quo."

The Dow Jones industrial average advanced 36.47 points, to 3244.11, with Procter & Gamble and Goodyear Tire & Rubber accounting for much of the gain. Computer-driven buy orders contributed to the index's rise, traders said.

Advancing common stocks outnumbered declining issues by about 9-to-5 on the New York Stock Exchange. Trading was the lightest since Oct. 14, with about 188 million shares changing hands on the Big Board. Standard & Poor's 500 index rose 4.07, to 418.17, and the NASDAQ Combined Composite index gained 1.61, to 598.61.

The Dow Jones transportation average increased 23.17, to 1356.34. The index is up 11.2 percent in the past two weeks on prospects that earnings are improving.

The 30-year Treasury bond stabilized yesterday after falling 5 points in the past six weeks. "The bond market looks like it has regained its footing," said Dennis Jarrett, market analyst at Kidder, Peabody & Co. "A firmer bond market is very important to the stock market."

The stock market also received a boost from evidence that an economic recovery is under way, Mr. Jarrett said. The rise in automobile sales, machine-tool orders and M2 money supply points to an economy that's beginning to strengthen. At the same time, unemployment claims were reported Thursday to be at the lowest level in two years.

"The lower interest rates of the past months is finally translating into increased economic growth," said David Boczar, market analyst at New Japan Securities International.

On the political front, Mr. Clinton is losing his lead in the polls. In the latest USA Today/CNN/Gallup poll, Mr. Clinton has 39 percent of the vote, President Bush has 32 percent and Ross Perot has 20 percent. The previous poll by the same group, taken Thursday, gave Mr. Clinton 43 percent, Mr. Bush 31 percent and Mr. Perot 18 percent.

Drug, health care, household product, long-distance telecommunication and telephone stocks were up the most, while international oil, food, aerospace, computer system and gold stocks fell the most.

U.S. Healthcare Inc., Citicorp, General Motors Corp., Syntex Corp. and British Steel PLC were the most actively traded stocks on the U.S. Composite.

U.S. Healthcare, the most actively traded U.S. stock, declined $6.375, to $43.375, after the company released third-quarter earnings that were below some analysts' expectations.

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