STOCKS : Dow Up 18.82 as Oils, Utilities Ignite Blue Chips

Oil and utility stocks led a blue chip rally Monday, while the broad market was mixed on fresh concern about the economy.

The Dow Jones industrial index closed 18.82 points higher at 2,917.33. But declining issues outnumbered advances by about 8-to-7 in nationwide trading of New York Stock Exchange-listed stocks, with 717 up, 792 down and 499 unchanged. Big Board volume totaled 146.47 million shares, compared to 149.07 million on Friday.

The Dow was off more than 20 points early on, still smarting from Friday’s weak gross national product figures for the second quarter.

“I think that people have gotten a lot more nervous in the last week,” said Andrew Riley, strategist at Yamaichi International. “The GNP figures pointed out the economy is a little weaker than what people thought it had been.”

But that weakness also has raised hopes that the Federal Reserve will cut interest rates further, to stave off recession. New optimism about rates fueled a bond rally Monday and drove up some utility stocks, which are viewed as stock proxies for bonds.

The Dow utility index jumped 3.70 points, or 1.8%, to 207.05. Southern Co. rose 5/8 to 25 7/8, Pacific Gas & Electric gained 5/8 to 22 5/8 and Con Ed added 1 to 24.

Meanwhile, oil stocks strengthened from the opening and extended their gains throughout the day on a positive outlook for oil prices. Smith Barney analyst Michael Young repeated his buy rating on five oil stocks, including Arco, which was up 2 3/4 to 127 3/4, and Texaco, which was up 1 3/8 to 62 7/8. Other gainers included Exxon, up 1 1/2 to 50 3/4, and Baker Hughes, up 3/4 to a new 52-week high of 31.

But selling continued to hit many stocks, including smaller issues. The NASDAQ over-the-counter composite index fell 3.21 points to 439.38, off 0.7%.

Other highlights:

* A published report that Chemical Bank is withdrawing from the financing deal for UAL caused UAL shares to tumble 6 1/8 to 156 7/8.

* High-tech losers included AST Research, off 1 to 22 3/8, Conner Peripherals, off 1 to 26 1/2, Marshall Industries, down 1 1/2 to 25 3/8, and Honeywell, down 1 1/2 to 103.

* Outside of tech, growth stocks were mixed. Disney rebounded 1 7/8 to 117 7/8 and Philip Morris rose 7/8 to 47 1/2. But Circus Circus lost 3 1/8 to 59 7/8 and Waste Management fell 1 to 41 3/4.

* Some retailers were hit on fresh concerns about consumer spending. Building materials retailer Lowe’s Cos. lost 4 to 32 5/8, as investors continued to pound the stock. Elsewhere, Gap fell 1 to 57 7/8; Home Depot lost 1 to 35 3/4.

* Teledyne gained 1 3/4 to 22, possibly on new rumors about the potential sale of its stakes in Litton and Curtiss-Wright. Litton rose 1 3/4 to 72; Curtiss rose 3 3/8 to 68 1/8.

* Among S&Ls;, HomeFed rebounded 1 3/8 to 11 3/8, after a battering last week. Meanwhile, CalFed lost 1 1/2 to a new low of 11 3/8.

* Broad Inc. fell 5/8 to 9 3/8. The financial services firm reported third-quarter earnings up 14%, but said fiscal 1990 earnings may fall short of its target by $1.20 a share because of investment losses.

In Tokyo, shares fell sharply in thin trading for the seventh day running. The Nikkei average lost 420.53 points or 1.4% to 30,442.95 after losing 506.27 Friday.

In London, the Financial Times 100-share index fell 13.6 points to 2,316.5. Shares also ended weaker in Frankfurt: The DAX index closed down 8.12 points at 1,911.69.

CREDIT: Bonds Rise on Belief That Rates Will Fall

Bond prices surged higher for the second-straight session Monday, boosted by the belief that the Federal Reserve, faced with a slowing economy, will be forced to lower interest rates.

The Treasury’s bellwether 30-year bond rose 25/32, or about $7.81 per $1,000 face amount, after gaining 11/16 Friday. The bond’s yield dropped to 8.40% from Friday’s 8.47%. The yield was at 8.57% a week ago.

Analysts said traders snapped up bonds on the belief that the country is closer to a recession than previously thought.

The investor attitude is that “we’re teetering on the edge of recession, and with that, rates have only one way to go--down,” said William V. Sullivan, analyst at Dean Witter Reynolds.

The federal funds rate, the interest that banks charge each other on overnight loans, was quoted at 7.938%, down from 8% Friday.

CURRENCY: Dollar Continues Its Recent Tailspin

The dollar fell broadly against major foreign currencies, continuing a drop prompted by a weakening U.S. economy and the prospect of lower interest rates.

“Global investors don’t think the dollar is very attractive right now,” said Earl I. Johnson, a vice president with Harris Trust & Savings Bank in Chicago.

Traders said the dollar closed at its lowest level since June, 1988, against the West German mark and at about a two-year low against the British pound.

In New York, the dollar ended at 1.6045 German marks, down from 1.6115 Friday, and at 147.85 yen, versus Friday’s close of 149.00.

Chris Mendell, a vice president with Security Pacific National Bank in Los Angeles, said that as differences in global interest rates have narrowed, rates of return for investors in Europe and Japan have become higher or comparable to those in the United States.

Meanwhile, gold fell 20 cents on the Commodity Exchange in New York to $367.80 an ounce.

COMMODITIES: Talk of Stockpiling Halts Copper Surge

Copper futures prices fell sharply on New York’s Commodity Exchange, ending a four-day rally amid speculation that London warehouse stocks of the metal have grown.

Copper futures settled 0.80 cent to 2.35 cents lower, with the contract for delivery in August off 2.3 cents to $1.244 a pound.

The copper market had risen strongly in five of the six previous sessions, including the last four, on concerns about relatively tight supplies and a strike that began Thursday against the state-owned Peruvian mining and refining company, Mineroperu.

But the strike was settled over the weekend, and analysts believe that demand for copper may be easing, based on indications that warehouse stocks documented by the London Metal Exchange rose in the past week. The London exchange’s report on warehouse stocks is due out today.

Meanwhile, crude oil prices staged a moderate rally in lackluster trading, with the market pondering the aftermath of last week’s OPEC meeting in Geneva. On the New York Mercantile Exchange, crude oil futures for September delivery gained 17 cents to close at $20.21 a barrel.

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