High-tech stocks lead in mixed trading Dow up 14

WALL STREET

May 25, 1993|By Bloomberg Business News

NEW YORK -- U.S. stocks finished mixed yesterday as consumer product and gold stocks weakened and technology issues gained. Traders also said they were encouraged by signs the Federal Reserve was ready to fight inflation.

"I think that the economy is improving," said James R. Solloway, director of research at Argus Research. "Consumers are definitely not in the vanguard of the advance, but it's improving."

The Dow Jones industrial average closed 14.95 higher, at 3,507.78, the second-highest close. The index's high is 3,523.28, reached May 20.

Shares of International Business Machines Corp. and American Telephone & Telegraph Co. were among the best performing Dow components, while Minnesota Mining & Manufacturing Co. and Procter & Gamble Co. were among the worst.

The Standard & Poor's 500-Stock Index gained 2.15, to 447.99, while the American Stock Exchange Market Value Index eased 1.17, to 431.69.

Meanwhile, the Nasdaq Composite Index closed up 0.40, to 694.49. Weakness was led by shares of Amgen Inc. while DSC Communications Corp. and Tele-Communications Inc. were among the best performing OTC issues.

"There's no question about it," said Lance Zipper, head of over-the-counter trading at Kidder Peabody & Co. High-tech issues are "what's leading our market."

Declining issues on the New York Stock Exchange were leading advancers 8-to-7. Decliners were even with gainers on the Nasdaq.

Trading on the Big Board was light compared with Friday's double-witching hour, when stock and stock-index options for May delivery expired. Trading amounted to about 198 million shares, compared with a three-month average of 259 million shares a day.

Long distance companies, led by shares of MCI Communications Corp., were among the best performing industry groups. MCI, the global telecommunications company, split its shares 2-for-1. MCI closed up 25 cents, at $51.25, while AT&T rose $1.375, to $60.50.

Meanwhile, consumer product stocks were led lower amid weakness in shares of Kellogg Co. and General Mills Inc. Kellogg, the world's top producer of ready-to-eat cereals, said it expected second-quarter income to be 10 percent below the 68 cents a share of a year ago.

Stocks opened lower yesterday morning amid worries that recent signals of higher inflation translated into rising interest rates. Concern later subsided, though, as investors viewed possible action by the Federal Reserve as an attempt to restrain rising prices.

At last week's closed-door meeting of the Federal Open Market Committee, Federal Reserve officials voted to lean toward higher short-term interest rates, the Wall Street Journal reported.

Bearish sentiment, though, soon gave way to higher stock prices after investors in the bond market viewed the Fed's stance on higher rates in a positive light.

The benchmark 30-year Treasury bond, which opened as much as 13/32 lower, ended up 1/2, to yield 6.99 percent, down 4 basis points from levels on Friday.

Falling commodity prices have also helped temper anxiety about inflation. Gold, traditionally seen as an investment opportunity during times of inflation, closed down $3.70 an ounce, at $374.20 an ounce.

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