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Stock Rally Fades but Dow Still Up a Fraction

February 25, 1988|From Times Wire Services

NEW YORK — Stock prices managed a gain Wednesday, but gave up on a bigger rally that briefly brought the market to its best level since the October crash.

The Dow Jones industrial index closed 0.83 higher at 2,039.95, after going as high as 2,054 earlier.

Advancing issues outnumbered declining ones by about 8 to 7 on the New York Stock Exchange, with 825 up, 715 down and 449 unchanged.

Big Board volume totaled 212.73 million shares, against 192.26 million in the previous session.

The NYSE's composite index lost 0.19 to 148.54.

With no outside factors having much impact, traders were paying attention to technical factors within the market, gauging the ability of the Dow index to penetrate the 2,051.89 close of Jan. 7 that remains the peak since the Oct. 19 crash.

"We bumped our heads on 2,051 twice and then retreated, but the short sellers were not able to capitalize on it," said Alfred Goldman of A. G. Edwards & Sons. "That is a good sign, and it shows that momentum remains positive," he added.

Analysts said confidence has slowly been recovering lately after the market's historic drop last fall.

The economy has so far shown no signs of suffering any drastic harm from the crash, and interest rates have fallen since that time.

Secondary Issues Stronger

But traders have been taking a cautious approach, recalling how gains built up over many months were wiped out in a few short days in October.

Most of the broader market indicators have already surpassed their January best, indicating the recent superior performance of many smaller, secondary issues compared to the blue chips that make up the Dow.

Navistar, by far the lowest-priced component of the Dow index, jumped 3/4 to 5 1/2 for a gain of 15.8%. Some Wall Street analysts have been recommending the stock lately as a participant in the recovery in the industrial sector of the U.S. economy.

USG jumped 4 5/8 to 37 on news of a $42-a-share takeover proposal from a investment group known as Desert Partners L.P.

Coastal Corp. was actively traded, down 7/8 at 29 1/8. Underwriters priced an offering of 10 million Coastal shares at $29.50.

Stop & Shop rose 2 3/8 to 41 1/2. The company, opposing a $37-a-share takeover bid by Dart Group, said it is talking with several other parties about a possible deal.

Gainers among the blue chips included Eastman Kodak, up 5/8 at 41 3/8; USX, up 7/8 at 32 7/8; International Business Machines, up 3/4 at 116 1/8, and Sears Roebuck, up at 36. But Merck fell 2 1/8 to 163 and American Telephone & Telegraph was down at 29 3/8.

Indicators Mixed

The Wilshire index of 5,000 equities closed at 2,601.574, down 0.083.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 239.38 million shares.

Standard & Poor's index of 400 industrials dropped 0.71 to 305.06, and S&P's 500-stock composite index was down 0.59 at 264.43.

The NASDAQ composite index for the over-the-counter market gained 2.06 to 363.14. At the American Stock Exchange, the market-value index closed at 283.20, up 0.48.

In foreign trading share prices edged higher in thin trading, bringing an end to a strong two-day advance.

In London, the Financial Times-Stock Exchange 100-share index closed 2.2 points higher at 1,760.1.

Dealers there attributed the session's dullness to a lack of market-affecting news and uninspiring performances on Wall Street on Tuesday and early Wednesday.

In Tokyo, the Nikkei 225-share index closed at 24,968.65, up 19.20.

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