Dow up 9.67 despite fall in oil stocks

June 14, 1994|By Bloomberg Business News

NEW YORK -- U.S. stocks closed mixed yesterday as a rally among shares of economically sensitive companies offset weakness in Exxon Corp. and other oil stocks.

"People are trying to pick up what's valuable, like the autos, airlines and some of the computer stocks," said Steven Van Brunt, head trader at Nikko Securities. "The feeling is that interest rates aren't going much higher and the economy is growing at a stable rate."

The Dow Jones industrial average rose 9.67, to 3,783.12, driven by shares of companies that are sensitive to swings in the economy, such as Aluminum Co. of America, Du Pont Co. and International Paper Co.

Morgan Stanley & Co.'s cyclical index rose as much as 2.21, to 299.17, the highest since April 12. Phelps Dodge Corp. and Alcoa were the biggest gainers as aluminum prices rose and copper prices reached a year-and-a-half high.

Exxon fell $2.625, to $59.50, after a federal jury ruled that the oil company acted recklessly in the nation's largest oil spill, which took place five years ago in Alaska's Prince William Sound. Texaco Inc. was down $1.125, at $63.625, and Chevron Corp. was down 50 cents, at $44.875.

Among broad market measures, Standard & Poor's 500 index rose 0.43, to 459.10, amid gains in automakers, chemical companies and regional banks. Ford Motor Co. added $1.875, to $59; General Motors Corp. rose 75 cents, to $52.125; and Chrysler Corp. rose $1.375, to $48.375.

The Nasdaq combined composite index skidded 2.55, to 731.70. Oracle Systems Corp., MCI Communications Corp., and Tele-Communications Inc. were the biggest losers.

Trading was slow, with just 244 million shares changing hands on the New York Stock Exchange. Ten stocks fell for every nine that rose on the Big Board.

Gains in stock prices were tempered by a decline in European stock markets and a corresponding slide in the value of the dollar against some major currencies.

Stock prices fell in Europe amid renewed concern over inflation and questions about the political shifts indicated by last week's European parliamentary elections, the results of which were reported Sunday night.

Britain's FT-SE 100 index fell 1.30 percent; France's CAC 40 index fell 2.13 percent; Italy's MibTel index fell 2.77 percent; and Germany's DAX index fell 1.28 percent.

The dollar fell against the mark after Germany's ruling Christian Democrat party made strong gains in Sunday's European elections. The dollar fell 2.10 pfennigs, to 1.6455 marks, and also fell 0.75 yen, to 102.85 Japanese yen.

A falling dollar raises questions about whether the U.S. central bank will need to raise interest rates to prop up the currency. What's more, a weaker dollar makes imported goods more expensive, raising concern about inflation in the economy.

U.S. bond yields rose after Federal Reserve Governor Susan Phillips said the economy was reaching a point where inflation may once again become a concern. Ms. Phillips made the remarks at a banking conference in Basel, Switzerland.

The yield on the benchmark 30-year Treasury bond rose to 7.35 percent from 7.31 percent at Friday's close.

Analysts are looking to today's Labor Department report on consumer prices for an indication of inflation in the economy. The government will release May reports on retail sales, industrial production, plant use and housing starts this week as well.

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