Stocks Eke Out Small Gain In Cautious Trading

Stocks struggled to meager gains Wednesday despite rising interest rates in the bond market.

But trading turned cautious in advance of the monthly report on U.S. payroll and wage levels, which could be a deciding factor in whether the Federal Reserve raises its lending rates to control inflation by slowing the economy.

The Dow Jones industrial average traded in a narrow indecisive range, rising 8.51 points to close at 5,656.90.

Most broad-market indexes turned higher late in the session, which was rather uneventful aside from an agreement by Staples to acquire office supply rival Office Depot for about $3.35 billion in stock.

“We’re on a knife’s edge,” said Peter Anderson, chief investment officer at the IDS Advisory Group in Minneapolis. “We’re all waiting on the unemployment report on Friday. The markets are wallowing around aimlessly, but they won’t be moving aimlessly Friday, unless the numbers are mush.”

Advancing issues outnumbered decliners by a 13-to-9 margin on the New York Stock Exchange, where volume totaled 351.28 million shares as of 4 p.m., up from Tuesday’s pace.

Some of the stocks that moved substantially or traded heavily Wednesday:

NYSE

Office Depot, up 4-37/64 at 20-29/64.

Staples (Nasdaq), down 3/4 at 18-3/4.

Staples agreed to buy rival office supplier Office Depot for $3.49 billion in stock. The deal would create a chain of more than 1,100 office supply stores in the United States and Canada.

General Motors, down 7/8 at 48-7/8.

The No. 1 automaker’s domestic sales fell 8 percent last month compared with August 1995, despite strong demand for its sport utility vehicles. GM was hurt by a 14 percent drop in car sales.

Rubbermaid, down 3-5/8 at 22-7/8.

The company agreed to buy privately held Graco Children’s Products for $320 million in cash, but said it expects its earnings will be flat this quarter. Graco makes infant strollers, toys, high chairs and other infant products.

NASDAQ

Richey Electronics, down 2-1/8 at 7-7/8.

The distributor of electronic parts said it would fall short of analysts’ earnings forecasts for its third quarter. Richey blamed rescheduling of orders for the disappointing projection, saying its customers are increasingly trying to keep inventory low.

DMX, up 3/16 at 1-3/8.

Tele-Communications Inc., the nation’s largest cable company, offered to buy the remaining 55 percent of the digital music programmer.

American Eagle Outfitters, up 4-11/16 at 25-15/16.

The retailer’s sales at stores open at least a year rose 8 percent last month compared with August 1995.