Stocks gain after sell-off, finish mixed Dow up 1.89


January 13, 1993|By Bloomberg Business News

NEW YORK -- Stocks, led by telephone and retail issues, recovered late in the session yesterday to close mixed.

The market ended on an upswing for the second straight session, as index funds bought stocks to take advantage of a decline in the Standard & Poor's 500 average.

The Dow Jones industrial average gained 1.89, to 3,264.64, after having slid to a session low of 3,239.52, as computer-driven sell orders clipped 17 points from the Dow.

Among broader averages, the Standard & Poor's 500 inched up 0.09, to 431.04. The NASDAQ index of smaller stocks, coming off a record closing high of 682.40 Monday, dropped 2.96, to 679.44.

"The market reacts to different signals," said Robert Stovall, president of Stovall/Twenty-First Advisers. Yesterday, "it was apparently influenced by the sagging markets in Europe, particularly in London, and the missile-rattling in the Middle East. [Monday], they ignored that and played catch-up ball with the battered-down blue chips."

The market's late recovery repaired most of the damage that occurred earlier yesterday amid losses in overseas equity markets, a spate of gloomy earnings outlooks in the computer industry, skittishness about retail sales and Wall Street's concern about President-elect Bill Clinton's plans to tackle the federal budget deficit.

Telephone, retail stores, tobacco and specialty retail stocks led the gain in the S&P 500, offsetting declines in drug, international oil, computer software and automobile stocks.

Retail stocks rose after Johnson Redbook Service reported a 2.4 percent rise in retail sales in early January. Skittishness about the report had depressed retail stocks earlier yesterday.

In addition, the stock market's failure early on to extend Monday's rebound disheartened investors. "We didn't get any kind of bounce from the sell-off of last week," said Dale Tills, manager of institutional equities trading at Charles Schwab. "People were looking for a rally to sell into."

Declining stocks narrowly exceeded advancing issues on the New York Stock Exchange. Trading was brisk, with 238 million shares changing hands.

Investor sentiment was further wounded by pessimistic outlooks from Maxtor, Marcam and Network Systems, and reports that Mr. Clinton might be reneging on his campaign promises to slash the deficit and cut taxes for the middle class.

The civil war in the former Yugoslavia, the crisis in Iraq and the breakdown of peace talks in Somalia also weighed on investors' minds, said Schwab's Mr. Tills.

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