Dow rises 8 points in see-saw day Profit-taking counters signs from Greenspan of no change in rates

770 million shares traded

Analysts expect Dow will test lows soon

most individuals hold

Stocks

October 30, 1997|By Bill Atkinson | Bill Atkinson,SUN STAFF Bloomberg News contributed to this article.

After two volatile sessions on Wall Street, the Dow Jones industrial average rose just eight points yesterday on heavy volume to close at 7,506.67.

The Dow, the bellwether index of 30 blue-chip company stocks, rose 0.11 percent for the day, but had leaped 122.79 points in the morning.

The fuel for the sudden burst, which began around 10 a.m., was testimony by Federal Reserve Chairman Alan Greenspan, who told the Joint Economic Committee of Congress that the economy continues to grow but at a slow pace. His words gave hope to investors who now believe that the Fed will not raise interest rates anytime soon.

The Dow see-sawed much of the day, and trading was furious.

Volume on the New York Stock Exchange soared to 770.1 million shares, the second heaviest day of trading in the big board's history. On Tuesday, 1.2 billion shares were traded as the Dow soared a record 337.17 points.

Yesterday's action contrasted sharply with Monday's 554.26-point plunge, its largest drop ever, and Tuesday's rapid rise.

"It calmed down, but in the very, very short term, I do feel we are due for another wave of sell-offs," said Morry A. Zolet, senior vice president of investments with Ferris, Baker Watts Inc. in Baltimore. "The individual investor hasn't felt the pain yet. They are calling up asking what they should buy."

Other experts agree.

"I think it will take some more time before you get a sustained rally," said David Straus, senior portfolio manager with Washington-based J. L. Capital Management Inc., a subsidiary of Johnston, Lemon & Co.

Straus and other experts believe in that the up-coming days, the market will "test the lows," meaning the Dow will slide to 7,161.15 points, the low it reached Monday, before rebounding.

While the Dow edged higher, other key indexes sagged.

The Standard & Poor's 500 stock index fell 2.69 points, or 0.29 percent, to 919.16. The Nasdaq, heavily weighted with technology companies and many small firms, was down 0.27 points, or 0.02 percent, to 1,602.75.

Overall trading was mixed, but many companies in Maryland had a good day.

Shares of Chevy Chase-based HealthCare Financial Partners Inc. jumped $2.875 to $34.375; Micros Systems Inc. of Beltsville gained $2.50 to close at $46; Baltimore-based Sylvan Learning Systems Inc. rose $2.375 to $41.625, and Integrated Health Services Inc. of Owings Mills was up $2 to $33.50.

Dell Computer Corp., which fell 50 cents to $83.50, and Compaq Computer Corp., which lost $3.8125 to $63.4375, led a slump in computer shares. Ascend Communications Corp. slid $1 to $28.4375 and Sun Microsystems Inc. dropped $1.8125 to $34.375.

Intel slumped $4.75 to $80.25 after dismissing speculation that it would boost its share buyback program. On Tuesday, the world's biggest semiconductor company rallied $10.25 on expectations of an imminent buyback announcement.

The Morgan Stanley high tech index dropped 4.22 to 460.14 yesterday.

Among other broad market indexes, the Russell 2,000 index of small capitalization stocks added 5.52 to 434.87; the Wilshire 5,000 index, comprising stocks on the New York, American and Nasdaq stock exchanges, climbed 5.43 to 8,900.79; the American Stock Exchange composite index increased 5.87 to 676.41; and the S&P 400 midcap index gained 1.74 to 317.94.

Pier 1 Imports Inc. led the Russell rise, climbing $2.4375 to $18.9375.

Two stocks rose yesterday for every one that fell on the New York Stock Exchange.

The yield on the benchmark 30-year Treasury bond fell to 6.20 percent from 6.29 percent yesterday.

BankBoston Corp. rose $2.625, or 3.5 percent, to $84.375; TransAmerica Corp. gained $2.875 to $102.375; and American International Group Inc. rose $1.4375 to $104.

Carson Pirie Scott & Co. rallied $7.625 to $45.125 after Proffitt's Inc. said it will buy the retailer for $790 million in stocks to create the fourth-largest department stores chain in the United States. Proffitt's rose $1.375 to $28.125.

Pub Date: 10/30/97

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