Stock trading soars as bond yields climb Broader indexes gain but Dow slips 1.09

March 16, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK - U.S. stocks were mixed in heavy trading yesterday as rising bond yields dimmed the outlook for higher corporate profits this year. Semiconductor and computer stocks gained.

Borrowing costs for companies and consumers rose after a report from the Federal Reserve showed booming activity at factories and utilities last month. If interest rates rise further and slow the economy's expansion, spending on goods and services will dry up and earnings could drop, investors said.

The Dow Jones industrial average fell 1.09 to 5,584.97 after being down 35.05 points earlier. The decline, which came one week after the 30-stock average plummeted 171 points, was led by Exxon Corp. and Texaco Inc. For the week, the Dow rose 2.1 percent, partly recovering from the previous Friday's plunge.

Trading volume soared, with more than 536 million shares changing hands on the New York Stock Exchange the fifth-most-active day since its founding in 1792. More than 110 million shares traded in the first 10 minutes of trading alone. The record is 636.8 million shares on Dec. 15.

Yesterday was "triple witching," when futures and options on U.S. stock indexes and options on individual stocks expire simultaneously. Orders to buy and sell large quantities of stocks sometimes lead to an imbalance between buyers and sellers, which can cause dramatic price swings.

Among broad market indexes, the Nasdaq composite index rose 8.52 to 1,099.59, bringing its gain for the week to 3.37 percent; the Standard & Poor's 500 index rose 0.56 to 641.43, putting it 1.25 percent ahead for the week; the Russell 2000 index of small capitalization stocks was unchanged at 325.08; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, rose 8.86 to 6,315.53; the American Stock Exchange market value index fell 0.27 to 561.51; and the S&P 400 Midcap index gained 0.79 to 229.22.

Yesterday's most active stocks in U.S. composite trading were Kmart Corp., Micron Technology Inc., Intel Corp., Wal-Mart Stores Inc. and Oracle Corp.

The yield on the benchmark 30-year Treasury bond rose to 6.73 percent the highest since Aug. 24 from 6.68 percent yesterday after the Fed report raised concern that inflation may accelerate.

Pub Date: 3/16/96

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