Late Buying Spree Pushes Dow Up 9.12

The stock market moved ahead Thursday, but a cautious mood prevailed with traders awaiting new reports on economic conditions.

The Dow Jones index of 30 industrials ended at its second-highest close after trading near its opening level for much of a fairly sluggish session. The industrial average rose 9.12 to 2,737.27, pushed up by a late round of buying.

Advancing issues outnumbered declining ones by nearly 6 to 5 in nationwide trading of New York Stock Exchange-listed stocks.

Big Board volume eased to 143.42 million shares from 174.35 million Wednesday.

Wall Street analysts said the market stayed in a holding pattern for much of the day before today’s release of the Labor Department report on the employment situation in August and the August survey of purchasing managers.

The Commerce Department’s report Thursday that orders to U.S. factories sagged 1.7% in July to the lowest level in eight months went largely ignored by financial markets.

High-flying airline stocks lost altitude in response to a report that federal regulators soon may move to curb leveraged buyouts and foreign investment in the industry.

A big losers in the airline sector was AMR, parent of American Airlines, which plunged 5 to 88 as more than 3.7 million shares changed hands, making it the Big Board’s most active issue. The stock recently soared on speculation that it would be a takeover target.

Delta dropped 4 1/8 to 79 7/8; Southwest Airlines slid 1 3/8 to 28 7/8; UAL, owner of United Airlines, fell 1/4 to 279 3/4, and Texas Air, which owns Continental and Eastern, tumbled 1 1/8 to 20 5/8 on the American Stock Exchange.

Shares of First Interstate Bancorp, the Los Angeles-based parent of First Interstate Bank, jumped 2 5/8 to 69 5/8. About 484,000 shares traded hands, about twice the normal volume. A recent magazine article mentioned that Wells Fargo might be interested in acquiring First Interstate, which has periodically been the subject of takeover rumors the past few months. Both First Interstate and Wells Fargo declined to comment.

Union Carbide, the second most heavily traded NYSE-listed stock, rose 1 3/8 to 31 1/8 on word that an earnings forecast for the company had been raised.

Ford rose 7/8 to 53 7/8. Reports circulated that Ford might be interested in acquiring the passenger car division of Sweden’s Saab-Scania AB. Jan-Erik Larsson, head of Saab’s auto division, declined to clarify a report in the Stockholm tabloid Expressen that a takeover deal with Ford was imminent.

Prices on the Tokyo Stock Exchange weakened in moderate trading because of a combination of index-related selling and buying. The key Nikkei 225-share average lost 40.46 to close at 34,431.20.

In London, share prices ended higher as the market drifted in tentative trading. The Financial Times 100-share index ended up 6.6 at 2,387.9.

Credit

Bond prices fell despite the Commerce Department’s factory orders report that seemed to indicate sluggish growth, which ordinarily strengthens the value of fixed-income securities.

The Treasury’s benchmark 30-year bond fell 9/32 point, or nearly $3 per $1,000 face amount, while its yield rose to 8.19% from 8.17% late Wednesday.

Signs of an economic slowdown usually help bond prices by calming fears of inflation. But Thursday’s report came after a string of other reports that indicated the economy was continuing to grow at a fair clip.

The federal funds rate, the interest on overnight loans between banks, was quoted at 8.875%, unchanged from late Wednesday.

Commodities

Prices of copper futures surged in late trading on New York’s Commodity Exchange on renewed supply jitters prompted by plans for a strike at a mine in Chile, the world’s largest copper producer.

On other markets, frost fears sent most grain and soybean futures higher, pork belly futures rose sharply while livestock futures were mixed, precious metals retreated and energy futures advanced.

Copper settled 2.95 to 3.35 cents higher, with the contract for delivery in September at $1.319 a pound.

Copper miners at the Chilean Copper Corp.’s El Salvador mine were scheduled to walk out today, which would add a fourth major mine to those shut down worldwide by strikes, bankruptcy or terrorism.

Prices of soybean futures jumped as much as 10.25 cents a bushel on the Chicago Board of Trade amid fears that freezing temperatures could strike maturing crops in the Midwest as early as next week.

Michael Palmerino, a senior agricultural meteorologist with Weather Services Corp. in Bedford, Mass., said his firm sees a 1-in-3 chance of a significant freeze in the Midwest during September, compared to the normal odds of 1 in 15.

Currency

The dollar rose sharply against all key currencies, reaching a two-month high against the Japanese yen.

The market’s general mood toward the dollar remained bullish after a string of recent economic reports pointing toward continued growth.