STOCKS : Dow Up 12.74 as Late Rally Lifts Market

A late spurt of buying helped stocks finish modestly higher Monday, but volume remained slow.

The Dow Jones industrial average gained 12.74 points to 2,985.24. On the New York Stock Exchange, 818 stocks rose while 704 fell, and volume totaled just 136 million shares at 5 p.m. EDT.

“We need a piece of news to break this market out of its trading range,” said Edward Shopkorn, analyst at Mabon Securities.

Investors remain anxious about the strength of the economy’s recovery. Friday’s report that the economy grew at an anemic 0.4% rate in the second quarter fueled worries that it may start shrinking again after one quarter of expansion--a “double-dip” recession.

Traders are awaiting a number of reports on the economy this week, including consumer confidence today, leading indicators Wednesday, the purchasing managers survey Thursday and July employment Friday.

Among the market highlights:

* The Dow utilities index surged 1.63 points, or 0.8%, to 204.60, as investors sought to lock in utility dividend yields--apparently betting on lower interest rates ahead with a slowing economy. SCEcorp jumped 1/2 to 41 3/8, Con Ed gained 1/2 to 25 5/8, Dominion Resources rose 1/2 to 48 7/8, and Detroit Edison added 3/8 to 29 7/8.

* Energy stocks rose on a bullish outlook in Barron’s magazine. Arco climbed 2 1/8 to 123, Mobil rose 3/4 to 67 1/8, Texaco jumped 1 1/4 to 64 1/8, and Chevron advanced 1 to 71 3/8.

* Food stocks attracted renewed interest. Castle & Cooke rose 3/4 to 44 1/8, and Quaker Oats gained 5/8 to 59 7/8. Drug stocks also were strong, as Johnson & Johnson added 1 7/8 to 89 3/4, Merck climbed 1 1/2 to 124 3/4, and Amgen rose 4 to a new all-time high of 144 3/4.

* Telefonos de Mexico, the Mexican phone company, gained 3/8 to 31 3/4 on the NYSE after it posted better-than-expected first-half results. Salomon Bros. and Goldman Sachs repeated “buy” ratings.

* On the downside, Vicorp dropped 3 to 28 1/4. Brokerages Montgomery Securities and Raymond James lowered profit estimates on the restaurant chain (Bakers Square, Village Inn).

* El Segundo-based Computer Sciences plunged 6 5/8 to 61 1/2. The computer-services company released disappointing second-quarter results and also warned of a flat outlook for the coming quarter.

In overseas trading, Tokyo’s 225-share Nikkei average fell 75.49 points to 23,443.58 as the still-bubbling Japanese stock market scandal continued to erode investor confidence. At midday today, however, the Nikkei was up 399.80 points to 23,843.38.

In London, the 100-share Financial Times index jumped 5.7% to a record 2,595.0 on optimism about a recovery in the British economy.

In Frankfurt, Germany, the 30-share DAX index eased 0.07 points to 1,605.57.

Credit

Bond prices were mixed as many traders awaited the government’s huge bond auction next week.

The Treasury’s 30-year bond fell 1/16 point, or 63 cents per $1,000 in light trading. Its yield inched up to 8.39% from 8.38% Friday.

The Treasury is expected to sell nearly $38 billion in bonds and notes next week.

The federal funds rate, the interest on overnight loans between banks, was quoted at 5 3/4%, unchanged from late Friday.

Currency

The dollar edged higher in quiet trading as traders waited for the first glimpse this week of the economy’s performance in July.

In New York, the dollar closed at 1.747 German marks, up from 1.743 Friday. But it dropped 0.25 Japanese yen to 137.85.

Commodities

Corn and soybean prices surged on the Chicago Board of Trade in reaction to dry Midwestern weather and forecasts for more.

Corn futures settled 2 1/2 to 7 1/4 cents higher, with the September contract at $2.56 3/4 a bushel; soybeans rose 15 1/2 to 22 3/4 cents, with August at $5.82 a bushel.

Meanwhile, light, sweet crude oil settled 0.13 cent lower to 0.01 cent higher, with September at $21.35 a barrel on the New York Merc.

Gold finished $2.70 to $2.90 lower on New York’s Comex, with August at $363.40 an ounce. Silver was 1.4 to 1.5 cents lower, with July at $4.06.

Market Roundup, D12