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Stocks Resume Year-End Rally; Dow Climbs 27.19

December 23, 1987|Associated Press

NEW YORK — The stock market turned upward today, resuming its year-end rally after Tuesday's setback and pushing past the 2,000 level in the Dow Jones industrial index.

The Dow index of 30 industrials, down 11.93 on Tuesday, climbed 27.19 to 2,005.64.

Advancing issues outnumbered declines by about 5 to 2 on the New York Stock Exchange, with 1,163 up, 465 down and 351 unchanged.

Big Board volume totaled 203.11 million shares, against 192.65 million in the previous session. The NYSE's composite index rose 1.82 to 141.36.

The dollar rose in New York foreign exchange trading, and interest rates fell in the credit markets, following a statement by the Group of Seven industrialized nations.

In that communique, policy makers declared that the dollar has fallen far enough and suggested that they would intervene to keep it in a range they did not disclose.

Nigel Lawson, Britain's chancellor of the exchequer, said he believed that the dollar was undervalued. Gerhard Stoltenberg, West Germany's finance minister, said the G-7 nations want to renew and strengthen their cooperation on economic matters.

Analysts differed in their views of the significance of those statements. But stock traders apparently saw it as a plus for the trade outlook and prospects for at least a stable dollar.

Bond prices rose sharply and interest rates dropped in early trading today, a reaction to an international agreement aimed at stabilizing the weak dollar.

The Treasury's key 30-year bond, which lost about $13 per $1,000 in face amount over Monday and Tuesday because of concern about higher inflation, jumped $15 per $1,000 in face amount this morning. Its yield, which moves inversely to price, fell to 8.92% from 9.04% late Tuesday.

In the secondary market for Treasury bonds, prices of short-term governments rose point, intermediate maturities rose 3/4 point and long-term issues rose 1 1/2 points, the investment firm of Salomon Bros. said.

The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, rose 0.49 to 110.46. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, rose 3.42 to 1,154.00.

The federal funds rate, the interest on overnight loans between banks, traded at 6.688%, down from 6.75%late Tuesday.

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