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Investor Hopes Boost Market; Dow Up 16.45 : Interest Rate Drop, Signs of Economic Gains Cited

November 04, 1986|From Times Wire Services

NEW YORK — The stock market kept pushing ahead Monday, extending last week's advance as interest rates fell.

The Dow Jones average of 30 industrials, up 45.55 points last week, rose another 16.45 to 1,894.26.

Volume on the New York Stock Exchange came to 138.22 million shares, down from 147.21 million on Friday.

Analysts said the market continued to benefit from a spreading belief that economic growth was perking up without exerting any substantial upward pressure on interest rates.

The National Assn. of Purchasing Management said a monthly survey of its members found that the economy expanded in October, though at a slower pace than in the two preceding months.

At the same time, traders seemed to be hopeful that lively demand awaited the federal government's quarterly financing, in which the Treasury plans to auction $29 billion in bonds and notes today through Thursday. It would be a positive development for the interest rate outlook, analysts said, if the refunding can be carried out smoothly.

Celanese Stock Zooms

In the credit markets, prices of the Treasury's bellwether 30-year issue was up 7/16 point, or less than $5 for each $1,000 in face value, as its yield fell to 7.58% from 7.62% Friday.

On the Big Board, Celanese, which agreed to be acquired by Hoechst AG of West Germany for $245 a share, jumped 24 to 242 1/2.

Eastman Kodak gained 2 7/8 to 64. The company reported third-quarter earnings of $1.17 a share, against $1.09 in the comparable period a year ago.

Auto issues were strong, with General Motors up 1 3/8 at 72 1/2, Ford Motor up 1 7/8 at 59 and Chrysler 7/8 higher at 39 3/8.

Among other blue chips, International Business Machines picked up 2 3/4 to 126 3/8, Procter & Gamble rose 1 3/4 to 76 3/4, General Electric rose 1 1/8 to 77 3/8 and Exxon climbed 1 3/8 to 69 3/8.

Gillette, discussed as a possible takeover candidate, gained 3 3/8 to 48 1/8.

Large blocks of 10,000 or more shares traded on the NYSE totaled 2,830, compared to 3,136 on Friday.

Bond Prices Rise

In the secondary market for Treasury bonds, prices of short-term governments were up 3/32 point, intermediate maturities were up by between 3/16 point and 5/16 point and 20-year issues were up 9/16 point, according to the investment firm of Salomon Bros. The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

In corporate trading, industrials were up point and utilities were up 3/8 point in moderate dealings. Among tax-exempt municipal bonds, general obligations and revenue bonds were unchanged in light trading.

Yields on three-month Treasury bills rose 2 basis points to 5.23%. Six-month bills rose 1 basis point to 5.30% and one-year bills were unchanged at 5.41%. A basis point is one-hundredth of a percentage point.

The federal funds rate, the interest on overnight loans between banks, traded at 5.875%, unchanged from Friday.

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