Surging oil stocks fuel market Dow gains 35

WALL STREET

January 26, 1993|By Bloomberg Business News

NEW YORK -- U.S. stocks rallied yesterday as a decline in Treasury bond yields and surging oil-related stocks spurred the market.

Yesterday was "the best day the stock market has had this year," said Edward Collins, executive vice president of institutional trading at Daiwa Securities (America).

The Dow Jones industrial average closed 35.39 higher, at 3292.20, after rising as high as 3294.36. Gains in Exxon Corp., Texaco Inc. and Chevron Corp. accounted for about one-third of the advance as oil stocks soared on speculation that OPEC might seek to cut production. It was the index's biggest one-day gain since Dec. 18.

Sears, Roebuck & Co. also boosted the average. Sears advanced $1.875, to $50.75, after the company announced plans to take a charge of $1.7 billion to abandon the catalog business after almost 100 years, close 113 unprofitable stores and eliminate 50,000 jobs.

The NASDAQ Combined Composite index surged 5.32, to an all-time high of 706.95, as the rally in companies with smaller market value continues. Standard & Poor's 500 index rose 3.89, to 440.00, and the American Stock Exchange Market Value Index increased 3.16, to 409.52.

Advancing common stocks outnumbered declining issues by about 11-to-5 on the New York Stock Exchange. Trading was active, with about 290 million shares changing hands on the Big Board. The benchmark 30-year Treasury bond was up 1 1/32, to yield 7.21 percent, the lowest level in six years.

"Everybody is expecting the Clinton administration to lower the deficit," said Ralph Acampora, market analyst at Prudential Securities Inc. Treasury Secretary Lloyd Bentsen said over the weekend that the administration probably would propose an energy-consumption tax to reduce the $290 billion-a-year deficit.

Oil stocks rallied after a report in the New York Times said Saudi Arabia was calling on the Organization of Petroleum Exporting Countries to reduce output by more than a million barrels a day.

OPEC is meeting Feb. 13 in Vienna, Austria, to discuss setting production levels for the second quarter. The Times report said the Saudis and Iranians, who are bitter enemies in the oil industry, agreed to coordinate policy to force other OPEC countries to reduce production.

Crude oil for March delivery gained 83 cents a barrel, to $19.66, the highest level this year.

Oil stocks also received a boost from stronger-than-expected earnings released by companies including Amoco, Exxon, Texaco and Mobil, said Alan Gaines, president of Gaines, Berland Inc., a New York-based brokerage.

Exxon said fourth-quarter earnings rose to $1.4 billion, or $1.12 a share, from $1.12 billion, or 89 cents, last year.

Among other oil stocks, Mobil rose $2.625, to $62.875; Atlantic Richfield rose $5.25, to $115; Texaco rose $1.75, to $59.875; and Unocal rose $1.50, to $25.625.

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