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Dow Gains 5.90; Stocks Mixed in Heavy Trading

January 16, 1987|Associated Press

NEW YORK — The stock market was widely mixed in heavy trading today, running into some resistance after the record-breaking advance that began with the start of the new year.

The Dow Jones average of 30 industrials rose 5.90 to 2,076.63, posting its 10th straight record high and its 11th consecutive gain since New Year's.

For the week the average sported a net advance of 70.72 points.

But declining issues outnumbered advances by about seven to four in the daily tally on the New York Stock Exchange, with 591 up, 1,082 down and 337 unchanged.

Big Board volume totaled 218.39 million shares, against Thursday's record of 253.12 million.

The NYSE's composite index added 0.12 to 152.21. At the American Stock Exchange, the market-value index was down 1.79 at 290.76.

The Federal Reserve Board reported this morning that industrial production increased 0.5% in December.

That provided fresh fuel for hopes that economic growth and corporate profits will improve at a faster pace in the months ahead.

But analysts said some traders evidently decided that the market had gone to unwonted extremes with the 174.78-point rise in the Dow Jones industrial average over the first 10 sessions of 1987.

So today's activity became a tug-of-war between latecomers eager to put money into stocks and sellers wanting to cash in their gains.

Bond prices sported modest gains early today as the credit markets welcomed signs that the dollar is steadying after its recent plunge and despite a fairly strong reading on U.S. industrial production.

"The bond market has been dancing up and down with the dollar this week," said Maury Harris, a vice president and economist for PaineWebber Inc. in New York. The dollar's weak performance earlier in the week raised doubts that foreign demand for U.S. securities would hold up if returns on dollar-denominated investments became less attractive.

The credit markets improved Thursday as the dollar regained some ground against other major currencies. In the early going today, the key 30-year Treasury bond rose about point, or $2.50 for each $1,000 in face amount, and its yield edged down to 7.36% from 7.38% late Thursday.

Harris said the industrial production report was consistent with other evidence of rebounding economic activity, something that ordinarily would depress the bond market.

In the secondary market for Treasury securities, prices of short-term governments were up 1/32 point, intermediate maturities moved up by 1/32 point to 1/8 point and the 20-year issue rose 3/16 point, according to the investment firm 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 dealings, industrials and utilities gained point and moderate trading volume.

Among municipal bonds, general obligations rose point in light trading and revenue bonds were 1/8 point higher in low volume.

The federal funds rate, the interest on overnight loans between banks, traded at 5 15/16%, down from 6% late Thursday.

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