Stable bond market pulls U.S. stocks out of slump

WALL STREET

January 12, 1993|By Bloomberg Business News

NEW YORK -- A firming in Treasury bond prices lifted U.S. stocks from a two-day slump, as over-the-counter issues sprinted to a record yesterday.

"The fact that the bond market has stabilized has helped" stocks, said Peter Canelo, chief investment strategist at NatWest Securities.

Stock prices closed at session highs following a flurry of computerguided buy orders just before the close, according to Birinyi Associates. A resumption of the rally in computer, software, and semiconductor shares, combined with rebounds in battered blue chips like Merck & Co., buoyed share prices as well, traders said.

The Dow Jones industrial average rose 11.08, to 3262.75, recouping part of last week's 49.44-point loss.

Among broader market averages, the NASDAQ Combined Composite index climbed 5.19, to a record closing high of 682.40, eclipsing its previous high of 681.85, set Jan. 6. The Standard & Poor's 500 gained 1.90, to 430.95.

"Because interest rates are down," some index fund managers may have moved funds out of fixed-income investments or cash and into stocks, said Philip Smyth, market analyst at Birinyi Associates.

Computer systems, semiconductor, electric utilities and drug stocks went up the most in the S&P 500. Chemical, general retail stores, electrical equipment and entertainment issues dropped the most.

Telefonos de Mexico American depositary receipts, International Business Machines, Eastman Kodak Co., Intel Corp. and Novell Inc. were the five most actively traded stocks.

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