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Market Rallies in Late Trading; Dow Gains 8.48

June 04, 1986|From Times Wire Services

NEW YORK — The stock market, encouraged by hopes of lower interest rates, chalked up a modest gain after posting losses for most of the day Tuesday.

The Dow Jones average of 30 industrials, which had dropped back 14.76 points Monday, rose 8.48 to close at 1,870.43 in lackluster trading.

Volume on the New York Stock Exchange slowed to 114.71 million shares from 120.59 million on Monday.

Analysts said investors were encouraged by a rally in the bond market that picked up following a remark by Treasury Secretary James A. Baker III indicating that the long decline in interest rates may not be over.

Concern Over Rates

Recent reports pointing toward a strong economic performance in the second half have led to fears that interest rates might stabilize or even begin rising if the Federal Reserve Board moved to inhibit the return of inflation.

This prospect contributed strongly to Monday's stock market decline, which was aggravated by computerized program trades--buying stock index futures contracts while selling "baskets" of individual stocks.

On Tuesday, however, Baker was quoted as saying in Boston that "the improved economic environment provides scope for further declines in interest rates."

Among the most active shares on the New York Stock Exchange was John Blair & Co., up 1 3/4 at 28. The company was reported to have entered into an agreement to be acquired by Reliance Capital Group, a private investment partnership managed by a subsidiary of Reliance Group Holdings.

Insurance Stocks Dive

Insurance stocks were down sharply in the wake of proposed Florida legislation to roll back premium rates. Travelers Corp. was down 1 3/8 at 49 7/8.

Sperry was up 1/8 at 74 7/8, AT&T up at 24 5/8 and IBM up 1/2 at 152 3/4. ITT was off 7/8 to 46 3/4.

Financial issues were mostly down. First Boston was down 1 to 55 3/8. J. P. Morgan was off 7/8 to 87.

Digital Equipment was down 5/8 at 90 5/8, while Texas Instruments was off 2 at 136. Eastman Kodak was up 1 7/8 at 61 1/2.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 134.66 million shares.

Large blocks of 10,000 or more shares traded on the NYSE totaled 2,027, compared to 1,897 on Monday.

In the secondary market for Treasury bonds, prices of short-term governments rose 3/32 point, intermediate maturities rose 17/32 point and long-term issues were up 1 6/32 points, according to the investment firm of Salomon Bros.

Yields on three-month Treasury bills were up one basis point, or one-hundredth of a percentage point, to 6.39%. Six-month bills fell two basis points to 6.45%, while one-year bills were off four basis points at 6.53%.

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