Dow gains slightly trading slowed by explosions, fires


February 27, 1993|By Bloomberg Business News

NEW YORK -- U.S. stocks gained yesterday on optimism flowing from a government report the economy grew 4.8 percent in the fourth quarter, its best showing in five years.

Trading was slowed by explosions and related fires at the World Trade Center in New York City's financial district. "It was a very slow trading day, especially after the explosion occurred," said Richard Meyer, head of institutional trading at Ladenburg, Thalmann & Co.

The Dow Jones industrial average rose 5.67, to 3,370.81. Much of the gain occurred in the final minutes of trading when computer-driven buy orders were triggered. The index gained 48.63 points for the week.

Standard & Poor's 500 Index rose 1.06, to 443.39, and the New York Stock Exchange Composite Index increased 0.70, to 244.08. The American Stock Exchange Market Value Index advanced 1.41, to 406.84. The NASDAQ Combined Composite Index rose 3.70, to 670.77.

Advancing common stocks outnumbered declining issues by about 9-to-7 on the NYSE. Trading on the Big Board was about 240 million shares, the lightest in two weeks.

The rise in U.S. stocks was constrained yesterday by two reports indicating that the economic recovery might be slowing, traders and analysts said. "The purchasing managers report and the consumer confidence study definitely hurt the stock market," said Daniel Marciano, senior vice president in charge of trading at Dillon Read & Co.

The Purchasing Management Association of Chicago said its index fell to 60.6 in February from 60.9 in January, indicating that manufacturing activity slowed. The University of Michigan's consumer sentiment index declined in February.

"These reports are important because it's our first glance at how the economy behaved in February," said Thom Brown, managing director at Rutherford, Brown & Catherwood Inc. "What we saw in the two reports weren't great."

Offsetting these reports was a Commerce Department report that said the economy grew at a 4.8 percent rate in the fourth quarter, up from an initial estimate of 3.8 percent.

U.S. stocks remain caught in a tight range as investors try to decipher how President Clinton's economic plan would affect corporate profits and the direction of interest rates, analysts said.

Mr. Clinton proposed an economic plan last week that includes higher taxes and federal spending cuts in an effort to bring down the federal budget deficit to $206 billion by 1997 from $290 billion at the end of 1992.

"I'm convinced Clinton's plan is going to lead us back into a recession, and the unsteady trading of the past two weeks means a lot of other people do too," said Edward Collins, executive vice president at Daiwa Securities America.

Amgen Inc., Conner Peripherals Inc., Chemical Banking Corp., Wal-Mart Stores Inc. and Telefonos de Mexico S.A. were the five most actively traded issues on the U.S. Composite.

Computer disk-drive stocks declined, led by Conner Peripherals, which said its first-quarter earnings would fall below analysts' estimates. Lehman Brothers, Kidder Peabody, and Smith Barney lowered their ratings as Conner fell $1.50, to $16.75.

Shares of other disk-drive makers and personal computer makers, which buy from Conner, also fell. Seagate Technology Inc. decreased $1, to $15.625, and Quantum Corp. fell $1.625, to $15. Apple Computer Inc. slumped $1.75, to $53.

Telefonos de Mexico surged $2, to $49.625, after an analyst at Bear Stearns Cos. raised his rating to "strong buy" and his earnings estimates.

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