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Dow Does a Turnaround, Gains 14.09 : Stocks Still Riding in Tandem With Dollar

January 08, 1988|From Times Wire Services

NEW YORK — The stock market reversed course late Thursday, mirroring a strong recovery in the dollar, and closed with a moderate gain which extended the New Year rally.

The Dow Jones index of 30 industrials, down more than 20 points in early trading, closed with a 14.09-point gain at 2,051.89. That extended its rise so far in the new year to 113.06 points.

Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, with 946 up, 611 down and 423 unchanged.

Big Board volume totaled 175.36 million shares, against 169.73 million in the previous session.

Analysts said the dollar's fluctuations continued to set the mood for stock traders.

Stocks encountered some selling early in the session as the dollar pulled back a bit against leading foreign currencies. But as the day passed, the dollar resumed the rally it began at the start of the week, and stock prices rebounded as well.

"Basically, the stock market is riding the tail of the dollar," said Newton Zinder at Shearson Lehman Bros.

Support for 'January Effect'

With its performance this week, the market has stirred some memories of the way it began 1987 with a record run of 13 consecutive up days for the Dow industrial index. Over that span the index climbed 208.52 and broke 2,000 for the first time.

Of course, the mood is considerably less exuberant this year, with memories still fresh of the crash in October.

Still, the recent gains have provided support for followers of the so-called "January effect"--derived from studies showing a historical tendency for the market to rally in the first month of the year, with smaller stocks in particular attracting buyers.

Gainers among the blue chips in Thursday's trading included International Business Machines, up 1/2 at 123 3/8; General Electric, up at 47; General Motors, up 2 at 66; American Telephone & Telegraph, up 1 at 29, and Merck, up 2 at 166 3/4.

In foreign trading, share prices finished mixed on the London Stock Exchange. The Financial Times 100-share index inched up 0.1 to close at 1,787.2 in moderate trading.

On the Tokyo Stock Exchange, the Nikkei average added 1.63 points to finish at 22,792.13.

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