Optimism, late rally boost U.S. stocks Dow up 14

WALL STREET

December 09, 1992|By Bloomberg Business News

NEW YORK -- A rally in the final hour of trading pushed U.S. stocks higher for a fourth straight session yesterday. The advance was tied both to optimism about the economic recovery and a decline in Treasury bond yields.

The Dow Jones industrial average climbed 14.85, to 3322.18, the highest close since Sept. 18. Standard & Poor's 500 index rose 1.68, to a new high of 436.99.

The NASDAQ Combined Composite index increased 0.59, to a record closing high of 667.12. The American Stock Exchange Market Value index gained 0.29, to 394.65. Advancing common stocks outnumbered declining issues by about 8-to-7 on the New York Stock Exchange. Trading was active, with about 236 million shares changing hands on the Big Board.

"There wasn't much news to drive stocks in one direction or the other," said James Solloway, research director at Argus Research.

Retail stocks fell after the latest Johnson Redbook Service survey revealed that retail sales at 81 department, discount and chain stores were down 2.2 percent in the first week of December. Kmart Corp. declined 50 cents, to $26.125; May Department Stores Co. fell 37.5 cents, to $70.125; and Dillard Department Stores Inc. slid 75 cents, to $49.125.

"There's a high level of optimism tied to the economy and the stock market right now," Mr. Solloway said. "The optimism needs to be shaken out before the stock market can go much higher."

"People are overly optimistic about the economy," said Edward Collins, executive vice president of institutional trading at Daiwa Securities America. "All of a sudden people think it's going to be clear sailing, but it's going to be a struggle."

The stock market continues to get a boost from a decline in Treasury bond yields and the government's report that 100,000 new jobs were created in November, said William Lord, senior vice president in equity trading at Lehman Brothers.

The yield on the 30-year bond is down 17 basis points, to 7.43 percent, since Nov. 30. The fall is tied to expectations that the policies of the Federal Reserve and President-elect Bill Clinton will be conservative enough to keep interest rates down.

Sunward Technologies, First Colony Corp., Chrysler Corp., Home Shopping Network and American Dental Laser Inc. were the five most actively traded issues on the U.S. Composite.

Sunward Technologies, a maker of magnetic recording head products for computers, rose $1.0625, to $2.8125, in NASDAQ trading after an analyst recommended buying the stock on a CNBC television program.

First Colony, Ethyl Corp.'s insurance subsidiary that was spun off to the public Monday, closed $2.125 above its initial public offering price of $28. The offering of 8.6 million common shares, which were sold through a group led by First Boston Corp., represents 20 percent of Ethyl's stake in the company. Ethyl

closed 37.5 cents lower, at $29.50.

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