Dow Up 9; Stocks Rally on Interest Rate Drop

The stock market pushed higher Wednesday, rising in another broad-based rally aided by falling interest rates and investor confidence over prospects for stocks and the economy.

The Dow Jones average of 30 industrials, up a total of 52.87 points in the two previous sessions, rose 9.00 to 1,844.49.

Wider market indexes extended their gains, and advancing issues outnumbered decliners by more than two to one in New York Stock Exchange trading.

Helping stocks was a bond market rally, with prices of long-term Treasury issues rising by about $10 per $1,000 in face value on speculation of an impending round of interest rate cuts by the Federal Reserve Board and the central banks of West Germany and Japan.

Also depressing interest rates was a Commerce Department report that retail sales rose a slight 0.1% in July, signaling continued economic sluggishness that could encourage the Fed to push rates lower.

Analysts noted that trading volume had increased in each session this week, and advances have been in a wide range of sectors, including economically sensitive issues such as computers and airlines.

Confidence in Rebound

“These are the stocks that are now assuming the leadership,” said Michael Metz of Oppenheimer & Co. in New York. “I think the market’s telling you there’s confidence that there will be an economic rebound.”

Big Three Industries fell 3/8 to 28 and was the most active NYSE issue with 2.22 million shares changing hands.

Shares of major retailers rose broadly. Federated Department Stores was up 7/8 to 82, K mart 1 7/8 to 54 3/8, J. C. Penney 2 3/4 to 80, Wal-Mart 1 3/4 to 47 and Zayre 1 1/8 to 29 1/8.

ICN Pharmaceuticals of Costa Mesa rose 3 1/8 to 22 in heavy trading. Analysts said the rise stemmed from a buy recommendation by a major Wall Street investment firm.

Ford rose 1 to 60 in active trading, General Motors was down 7/8 to 72 5/8 and Chrysler was unchanged at 39 3/4.

Financial issues gained from the fall of interest rates. Chase Manhattan rose 1 1/8 to 42 1/8, Citicorp 1 to 55 1/8, J. P. Morgan 1 3/4 to 93 1/2, Paine Webber 1 5/8 to 39 and Morgan Stanley 1 5/8 to 71.

In active trading, bellwether IBM was up 1 1/2 to 134, Mobil rose 5/8 to 33 7/8, AT&T; fell 1/2 to 23 1/2 and Owens-Corning Fiberglas dropped 3/4 to 77 1/2.

Volume Climbs

Big Board volume totaled 156.4 million shares, against 131.71 million on Tuesday.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 185.21 million shares.

Standard & Poor’s index of 400 industrials rose 2.24 to 271.29, and S&P;’s 500-stock composite index was up 2.33 to 245.67.

In the bond market, the benchmark 30-year Treasury bond rose nearly a full point, or $10 for each $1,000 in face value, which drove down its yield to 7.28% from 7.36% late Tuesday.

In the secondary market for Treasury bonds, prices of short-term governments rose by 3/16 point to 5/16 point and intermediate maturities rose by 13/32 point to 9/16 point.

Yields on three-month Treasury bills slid 8 basis points to 5.56%. Six-month bills fell 8 basis points to 5.54%.