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FINANCIAL MARKETS : Stocks End Mixed, While Dollar Sinks

April 01, 1993

Market Overview

Highlights of Wednesday's market activity, compiled from Times staff and wire reports:

* Stocks finished the first quarter mixed after computer-driven sell programs helped kill a modest rally in the Dow industrials.

* The dollar plunged to another historic low against the yen in New York, and opened in Tokyo early today lower still, at 114.50 yen.

* Treasury bond yields inched higher as gold and other commodity prices rose further.

Stocks

The Dow industrials closed off 22.16 points to 3,435.11 as sell programs and last-minute portfolio tinkering hurt some multinational industrials.

The broad market was stronger: Advancing issues outnumbered losers by nearly 8 to 5 on the Big Board, as volume strengthened to 279.19 million shares from 231.19 million on Tuesday.

Also, the NASDAQ composite index continued to outshine the Dow, adding 3.88 points to 690.13.

But for the quarter, the Dow rose 4.1% while the NASDAQ gained 1.9%. The NASDAQ market has had troubled struggling back from a February selloff.

Stocks got some brief support from a Commerce Department report that U.S. factory orders rose 1.4% in February to a record high.

But selling of industrial issues swelled later in the day, as sell programs hit and as some investors apparently dumped multinational issues on worries about profits in the first quarter. Because of the recessions in Europe and Japan, U.S. multinationals' earnings may lag expectations, some analysts say.

However, Robert Stovall, president of Stovall/Twenty-First Advisers, noted that mutual fund managers are still "heavy in cash" from their record inflows in the first quarter. That money should continue to support stock prices overall as it's invested, he said.

Among the trading highlights:

* Industrial issues declining included Alcoa, off 1 1/4 to 64 1/2; Monsanto, down 1 3/8 to 49 3/4; GE, off 1 3/4 to 89 1/8; Caterpillar, down 1 1/8 to 59 1/8, and Cooper Industries, which lost 2 1/2 to 50 5/8.

Bucking the trend were some steel issues. The industry has been able to raise prices recently. USX-U.S. Steel added 1 1/8 to 39 3/4, Nucor rose 5/8 to 91 3/4, and Bethlehem Steel was up 1/4 to 17 5/8.

* Financial stocks capped a strong quarter with another rise. Morgan Stanley rose 2 to 64, First Interstate Bancorp gained 1 1/8 to 58 3/4, and S&L Golden West Financial added 1 1/4 to 48 7/8.

* Phone utilities were also in demand. NYNEX surged 1 1/2 to 92 1/8, Southwestern Bell gained 1 1/4 to 78 1/8, and Bell Atlantic rose 1 to 56.

* Health care stocks were mixed. Drug stocks failed to extend their Tuesday rally, even as another Clinton Administration official backed away from drug price-control proposals. Merck lost 1/2 to 35 3/8, Pfizer slipped 5/8 to 62 1/4, and Bristol-Myers eased 5/8 to 59 1/8.

But many HMO stocks jumped. PacifiCare 'A' soared 2 1/2 to 36, Wellpoint added 1 7/8 to 27 3/8, and U.S. Healthcare was up 1 1/2 to 46 1/4.

On the downside, Healthcare Compare plunged 5 5/8 to 12 7/8 after the medical-review service firm said it was uncomfortable with current 1993 earnings estimates.

* Among new issues, children's clothing retailer Gymboree sold 2.17 million shares at 20. The stock soared to 31 1/2 on NASDAQ.

Overseas, Tokyo stocks ended the fiscal year with a fast selloff, as the Nikkei index dropped 371.71 points to 18,591.45. At midday today, however, the Nikkei was up 93.92 points to 18,685.37.

In London, the FTSE-100 average rose 17.7 points to 2,878.7. In Frankfurt, the DAX average lost 0.86 point to 1,684.21.

Currency

The dollar started tumbling in Tokyo, where currency trading begins its day, falling nearly 2 yen in early trading.

Traders traced the decline to a large insurance firm unloading dollars in a thin market on the last day of Japan's fiscal year.

The sharp retreat spilled over into later markets and dragged down the dollar against other major foreign currencies. By the close in New York, the dollar was at 114.75 yen, down from Tuesday's 116.55 and a new postwar low.

Early today in Tokyo the dollar hit yet another low, at 114.50.

Analysts said many traders believe that Western pressure will continue on Japan to strengthen the yen as a way of reducing Japan's huge trade surplus.

Also, doubts are growing about the vitality of the U.S. economy, thus sapping traders' desire to hold dollars. A key report will come Friday, when the government releases its March employment data.

Against the German mark, the dollar dropped to 1.607 in New York from 1.617 on Tuesday.

Other Markets

Bond yields started the day by moving downward, but reversed later when a report from Chicago-area purchasing managers showed new signs of inflation.

By the close, the yield on the Treasury's 30-year bond was at 6.93%, up from Tuesday's 6.91%. Shorter-term yields also inched up.

Interest rates, which had been declining sharply in January and February, have been rising lately as inflationary signals have flared.

On Wednesday, many commodity prices advanced anew. Gold, which leaped $4.80 an ounce Tuesday in what many analysts called a technical rally, added 60 cents to $337.60 for near-term futures on New York's Comex.

Silver, however, slipped 0.7 cent an ounce to $3.88 after soaring 14.3 cents Tuesday.

On the New York Merc, light, sweet crude oil for May delivery rose 16 cents to $20.44 a barrel.

Elsewhere, lumber prices continued their descent after a brisk run-up in the first quarter. May lumber futures fell the $10 limit to $399 per thousand board feet. Some traders sense that the Clinton Administration will help end timber shortages by halting some exports.

In the municipal bond market, the state sold $800 million of new general obligation bonds. The average yield was 5.64%; the bonds were of varying terms.

Market Roundup, D8

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