Stocks boosted by strong T-bond sale Dow up 10


February 12, 1993|By Bloomberg Business News

NEW YORK -- U.S. stocks advanced yesterday on reports of strong demand during the final leg of the Treasury's $35.5 billion debt sale.

The stock market also was bolstered by rallies in leading companies such as Allied-Signal Inc., Sears, Roebuck & Co. and General Motors Corp. The Dow Jones industrial average ended a three-day slide by rising 10.27, to 3422.69.

The Dow industrials were buoyed by the 3/4 -point gain in the benchmark 30-year bond, as the yield fell 5 basis points, to 7.20 percent.

The U.S. Treasury completed its quarterly refunding yesterday by selling $9.25 billion of 30-year bonds at an average yield of 7.22 percent. The results were better than expected, said Kevin Flanagan, money market economist at Dean Witter Reynolds Inc.

"The bonds were taken at the lowest level since 1977, and the stock market liked the results," said Dennis Jarrett, chief market analyst at Kidder, Peabody & Co.

Investors were watching the Treasury bond market carefully because they're concerned that a rise in Treasury yields would lure money from the stock market, said Peter Cardillo, research director at Westfalia Investments. "The strong demand for 30-year bonds eased some of those concerns," he said.

Standard & Poor's 500 index rose 1.43, to 447.66, and the New York Stock Exchange Composite index advanced 0.79, to 246.72. The American Stock Exchange Market Value index increased 0.95, to 417.05. The NASDAQ Combined Composite index rose 0.86 to 695.88.

Advancing common stocks outnumbered declining issues by a ratio of about 3-to-2 on the NYSE. Trading was active, with about 255 million shares changing hands on the Big Board.

The stock market received more signs that an economic recovery was under way. The Commerce Department said retail sales increased 0.3 percent in January. In addition, the Labor Department said U.S. jobless claims fell 12,000, to 340,000, in the week that ended Jan. 30, the lowest level since the last full week of December.

"I think the underlying expectation is that the economy is forging ahead," said James Solloway, research director at Argus Research.

Allied-Signal rose $2.625, to $66.875. The company said it won a $500 million contract to develop a navigation system for a mobile rocket launcher that was used against Iraqi troops in the Persian Gulf war.

International Business Machines Corp. slumped $1.125, to $51.125. The computer giant is said to be planning to cut far

more than the 25,000 jobs that it previously said it would.

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