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Dow Up 25.70; Stocks Surge in Late Trading

February 23, 1988|From Times Wire Services

NEW YORK — Stock prices rose strongly Monday to near their post-Oct. 19 high, on a late burst of computer-directed program buying.

The Dow Jones index of 30 industrials climbed 25.70 to 2,040.29, hitting a new six-week high for the third straight session.

Advancing issues outnumbered declines by more than 5 to 2 on the New York Stock Exchange, with Big Board volume totaling 178.93 million shares, against Friday's 180.30 million.

Stock traders said technology stocks gave an initial upward bias to a market that has gained almost 130 points in the past two weeks.

Traders said a rally in the bond market at mid-afternoon played a major part in the stock market gains and eventually triggered computer-directed program buying.

The bond market rose on news that the federal budget showed a monthly surplus of $16.09 billion for January.

From a technical perspective, analysts said, the stock market's next hurdle will be surpassing the 2,051.89 post-crash high set Jan. 7.

Lingering Skepticism

Since October, the market has been unable to stay above 2,000. The longest stretch above 2,000 occurred in the first four trading days of 1988, but that was quickly quashed when the market tumbled 140 points on Jan. 8.

Memories of the January selloff as well as the widespread uncertainty about the economy and interest rates have made investors cautious whenever the Dow crosses 2,000, traders said.

"The market acts very well," said Bill Lord, a trader with Shearson Lehman Hutton, "but it has questionable internals. People's conviction about the health of the rally is not great and that's seen in the volume."

Despite the late surge of program trading, volume was relatively light since few individuals or institutional investors followed the lead of the program traders. This poor follow-through illustrated the lingering skepticism, traders said.

Shearson's Lord said, however, that "skeptics can keep a market building slowly, though investors may get a little frustrated if they don't see some (higher) volume soon."

Stocks of semiconductor producers rose on bargain hunting among investors whose fears of an economic recession were evaporating. Data Quest, a unit of Dun & Bradstreet, sees sales increasing at a rate of 21% this year, compared to 25% in 1987.

Texas Instruments rose 2 to 51, Motorola 2 to 46 7/8. In the over-the-counter market, Intel jumped 1 5/8 to 27 7/8 and LSI Logic advanced 1/2 to 9 1/8.

In foreign trading, share prices finished higher in modest trading on the London Stock Exchange, reflecting what dealers said was positive sentiment about the British economy. The gains also reflected a bullish outlook for some major companies' earnings reports due out later this week.

In London, the Financial Times 100-share index closed up 17.4 at 1,747.2.

On the Tokyo Stock Exchange, the Nikkei stock average closed at 24,846.71, up 73.30.

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