Blue-Chip Stocks Fuel Dow’s 49-Point Climb
Stocks were mixed Tuesday, with blue-chip shares rising as new data reinforced hopes the Federal Reserve won’t see a need to raise interest rates this week or in the near future.
The Dow Jones industrial average briefly dipped into negative territory in the afternoon after giving back a 75-point morning gain, but finished strong, rising 49.54 to 7,722.33. Financial services issues were among the Dow’s strongest issues, benefiting from the optimistic interest rate outlook.
Leading technology shares and smaller-company issues were mostly lower throughout the day, weighing down the Nasdaq market.
Stocks started the day flat, but the blue-chip sector quickly drew a boost from the bond market, where long-term interest rates fell after reports suggesting some moderation in factory activity and construction spending. The temporary afternoon pullback came with the release of a report showing some strength in retail sales.
“For the past two weeks or so, it has been difficult for the market to hold its gains,” said Rao Chalasani, chief investment strategist at Everen Securities in Chicago.
Advancing issues outnumbered decliners by a 3-to-2 margin on the New York Stock Exchange, where volume was heavy at 539.41 million shares as of 4 p.m., down slightly from Monday’s busy pace.
Some of the stocks that moved substantially or traded heavily Tuesday:
Office Depot, down 3-13/16 at 15-5/8.
Staples (Nasdaq), up 1-1/16 at 24-5/16.
A federal judge blocked Office Depot’s acquisition by Staples. Both office product retailers said their boards will review Monday’s ruling, but said the $4.3 billion deal was probably dead.
Westinghouse, up 11/16 at 23-13/16.
CBS and Microsoft denied a report in the New York Post saying Microsoft and Seagram both have made preliminary expressions of interest in purchasing CBS from Westinghouse. Seagram declined comment. Pittsburgh-based Westinghouse has announced plans to split the company’s industrial holdings from its media business.
Compaq Computer, up 2-3/8 at 101-7/8.
The largest personal computer maker announced a 5-for-2 split of its common stock, payable July 28 to shareholders of record on July 14. On Monday, Compaq introduced a PC to be sold for less than $1,000, including the monitor.
Boeing, up 1 at 54-1/16.
McDonnell Douglas, up 1-3/16 at 69-11/16.
The Federal Trade Commission cleared the way for Boeing’s acquisition of rival McDonnell Douglas, a $14 billion deal that would spawn the world’s largest aerospace company.
Peoplesoft, up 3-1/8 at 55-7/8.
Washington Mutual, up 4-1/16 at 63-13/16.
The stocks were included in Lehman Brothers’ 1997 “Ten Uncommon Values” stock portfolio.
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