Dow Climbs 15.67; Dollar Closes Higher : Market Overview

The stock market gained ground in an erratic session Wednesday, overcoming uncertainty about contradictory signals on the state of the economy.

* The 30-year Treasury bond’s yield remained unchanged at 7.61%.

Stocks

The Dow Jones average climbed 15.67 points to 3,251.40, bringing its recovery to 114.82 points since it hit its 1992 closing low of 3,136.58 on Oct. 9.

In the broader market, advancing issues outnumbered declines by about 10 to 7 on the New York Stock Exchange. Big Board volume came to an estimated 203.9 million shares against 201.73 million in the previous session.

The Commerce Department reported a 0.4% drop in new factory orders for durable goods in September, rather than the increase analysts had been expecting.

Orders for higher-priced, longer-lasting merchandise now have declined for three consecutive months.

That seemed to run counter to the news on Tuesday of much stronger than expected growth in the gross domestic product during the third quarter.

But analysts said investors still seemed to be anticipating an improved economy in 1993, perhaps encouraged by a more positive mood among consumers after next Tuesday’s election.

Among the market highlights:

* Ford Motor dropped 1 3/4 to 38 1/8 as the company posted a $158.9-million third-quarter loss and said losses could extend into the current quarter.

* Among the other leading auto stocks, General Motors fell 1 to 31 3/8, while Chrysler gained 1/8 to 27.

* RJR Nabisco Holdings added 1/8 to 8 3/8 in active trading. On Tuesday the company posted a 48% earnings gain for the third quarter.

* General Electric rose 1 1/8 to 77 3/4 after reports that entertainer Bill Cosby had stepped up as a possible buyer of the company’s National Broadcasting Co.

* Du Pont rose 5/8 to 48 7/8. The company posted earnings for the third quarter of 70 cents a share, down from 75 cents a share in the like period last year but about what analysts had expected.

* Other blue chips contributing to the Dow’s gain included International Business Machines, rallying 1 3/8 to 67 1/8 from its recent 10-year lows; Philip Morris, up 5/8 at 77; Walt Disney, up 1/2 at 40 1/4, and Union Carbide, up 3/4 at 14 1/2.

* Borden fell 3/4 to 27. Third-quarter results, reflecting a big restructuring charge, showed a $376.80-million loss.

* Genzyme Corp. sank 3 5/8 to 39 3/8. It reported a third-quarter profit that was below expectations. Smith Barney lowered its 1992 through 1995 earnings estimates for the company.

* Readers Digest Assn. climbed 1 3/4 to 54 7/8 on earnings for the fiscal first quarter ended Sept. 30 of 57 cents a share, up from 46 cents in the corresponding period a year ago.

Overseas, heavy losses in major financial sector shares pulled the rest of the Frankfurt market sharply lower in late trade. The 30-share DAX average ended 23.47 points lower at 1,510.30.

In London, the Financial Times 100-share average lost 19.4 points to close at 2,650.4. Share prices drifted lower in Tokyo, with the 225-issue Nikkei average losing 116.85 points to end at 17,068.41.

Credit

The price of the Treasury’s main 30-year bond gained 1/16 point, or 62 cents per $1,000 in face amount.

Treasury bond prices were mixed in morning trading. They fell a bit after the government released its durable goods report.

Normally, the market bids prices up on bad economic news on the theory that will lead to an easing of interest rates by the Federal Reserve. But lately it has worried that continued economic weakness will lead to government fiscal stimulus, which could be inflationary. Inflation erodes the value of bonds.

Later, however, bonds were boosted by the release of a CNN-USA Today poll, which showed Democrat Bill Clinton’s lead in the race against President Bush had narrowed to two percentage points.

The bond market fears Clinton, as President, would boost government spending to get the economy moving. Such spending could stoke inflation and drive up interest rates.

The federal funds rate, the interest on overnight loans between banks, was quoted at 3.375%, up from 2.388% late Tuesday.

Currency

The dollar continued its steady advance, settling higher across the board on world currency markets.

Analysts said the dollar continued to test the upward limits of its recent trading range, briefly piercing a key barrier against the German mark before retreating and settling firmly above a critical level of 123 Japanese yen.

In New York, the dollar hit 123.18 yen Japanese, up from 122.15 yen on Tuesday.

The greenback rose to 1.546 German marks, up from 1.529 marks the day before.

The British pound fell to $1.574, from $1.578.

Commodities

Crude oil futures prices rebounded after an early selloff linked to data that showed higher supplies of oil.

On other markets, cocoa was sharply higher, grains and soybeans were mostly lower, livestock and meat fell, energy was mixed, sugar gained, and precious metals were modestly higher.

Light, sweet crude oil for delivery in December settled at $21.12, up 10 cents per 42-gallon barrel, at the New York Mercantile Exchange.

Elsewhere, gold rose $2 to $339.40 an ounce on New York’s Commodity Exchange. Silver closed 1.8 cents higher at $3.770 an ounce.

Market Roundup, D8