Stocks Stage Recovery From Early Sell-Off
Signs of brisk holiday sales and manufacturing activity jostled the market’s tame inflation and interest rate outlook Monday, but stocks ended mixed as bargain hunters continued to devour every dip.
The Dow Jones industrial average finished unchanged at 6,521.70, having recovered from an early slide of nearly 49 points.
The technology-rich Nasdaq market rose to its sixth straight record high as computer-related shares rallied further, bolstered by hopes those issues might be the leading beneficiaries of a strong holiday season.
Cash registers were extremely busy at the nation’s stores over the long Thanksgiving weekend, several leading retailers reported.
“We won’t know until after Christmas whether (the strong demand) was due to promotions,” said Robert Streed, senior investment adviser at Northern Trust in Chicago, noting that profits could suffer if retailers used big discounts to generate sales. “Nonetheless people were spending their money and walking out with packages. So on the surface, it looks like we’re off to a good start.”
Some of the stocks that moved substantially or traded heavily Monday:
NYSE
America Online, up 4-5/8 at 39-7/8.
A Lehman Brothers research note said the online service is expected to report a strong subscriber growth number for November at a conference this week, the Dow Jones News Service reported, citing a contact at the investment firm. AOL’s growth rate had been slowing recently.
Sears, Roebuck and Co., up 1-1/2 at 51-1/4.
Federated Department Stores, up 1-5/8 at 35-3/4.
J.C. Penney, up 3/8 at 54-1/8.
Kmart, up 3/8 at 11-3/8.
Wal-Mart, unchanged at 25-1/2.
Early figures showed plenty of buying over Thanksgiving weekend, the kickoff of the holiday shopping season. After a dismal season a year ago, consumers crowded the nation’s stores and malls. Several retailers said they had their best Thanksgiving weekend ever.
NASDAQ
Eastbay, up 4-1/4 at 23-1/4.
Woolworth agreed to acquire the Wausau, Wis.based direct marketer of sneakers and athletic equipment in a deal valued at as much as $146 million. Woolworth, which owns the Foot Locker sneaker chain, will pay $24 a share for all Eastbay stock not held by Eastbay’s three co-founders, who will get $22 a share plus up to $1.75 a share if certain performance targets are met.
Zycon, up 3-1/2 at 16.
The maker of printed circuit boards agreed to be acquired by Dallas-based buyout concern Hicks Muse Tate & Furst for $180 million, or $16.25 per share. Zycon’s principal shareholders - representing 60 percent of the shares outstanding - have backed the deal.