Share this article

print logo


The stock market, relieved that the Federal Reserve did not raise interest rates Tuesday, maintained its composure in the face of a bond market slump and closed mixed.

The main focus for the financial markets was the Federal Open Market Committee meeting, which concluded in the early afternoon without any surprises. The Fed's policy arm, which gradually tightened credit availability starting in early 1994, hadn't been expected to hike rates again now because economic growth appears to have eased.

Heavy selling in bonds, incited by an unexpectedly robust reading on consumer confidence, dampened enthusiasm for equities, which depressed the Dow Jones industrial average.

The blue-chip indicator, which had marched to three closing records in a row and to eight new highs in the prior 12 sessions, retreated for the first time since March 21, losing 5.53 to 4,151.81.

But several broader stock measures performed better. The New York Stock Exchange composite index crept ahead 0.20 to 271.92, Standard & Poor's 500-stock index climbed 0.70 to 503.90, and the Nasdaq Stock Market composite rose 3.51 to 826.14. Although the gains were minor, all three indicators reached all-time highs.

At the American Stock Exchange, the market value index rose 0.33 to 461.52.

The Wilshire Associates Equity Index -- the market value of NYSE, American and Nasdaq issues -- was at a new high of 4,940.444 up 7.300 or 0.15 percent.

Gainers and losers ended the session almost even on the NYSE, where a closing tally showed 1,103 stocks up and 1,089 down.

Volume on the Big Board's floor expanded to 320.37 million shares, up from 296.30 million Monday.

Hugh Johnson, chief investment officer at First Albany Corp., blamed the selling in both the bond and stock markets to investors eager to cash in profits after the recent run-up in prices.

Adobe Systems rose 3 to 49 after it announced two agreements that would expand its presence as an Internet publisher.

Among other technology stocks, Intel gained 1 to 88 1/4 , Cisco rose 1 1/8 to 39 1/8 and Oracle added 3/8 to 32 3/4 .

The stock of apparel retailer The Limited gained 2 1/2 to 22 after the company said it planned to sell 10 percent to 15 percent stakes in two new divisions to capture a higher market value for its fast-growing lingerie and toiletries units.

News of a surprising surge in consumer optimism prompted a broad sell-off in the Treasury market Tuesday, driving bond prices lower for the first time in four sessions.

The prominent survey from the Conference Board seemed to contradict recent reports of an economic slowdown in early 1995. A series of data showing slower, non-inflationary growth fueled a three-month bond-market rally.

The price of the Treasury's main 30-year bond dropped 29-32 point, or $9.06 per $1,000 in face value. Its yield, which moves inversely from price, rose to 7.39 percent from a nine-month low of 7.31 percent late Monday.

There are no comments - be the first to comment