Bond Market Ends ‘97 With Healthy Advance

The bond market put the cork in a year of gains with another healthy advance on Wednesday, pushing yields on the government’s most widely-watched bond near the lowest level in more than four years.

The price of the benchmark 30-year Treasury bond gained 19/32 point, or $5.94 per $1,000 in face value. Its yield, which moves in the opposite direction, fell to 5.92 percent from 5.96 percent late Tuesday. For the year, yields on the long bond tumbled from 6.64 percent at the end of 1996.

The trend in yields on 30-year Treasury bonds is important because lenders use the security as a reference in setting rates that consumers pay for home mortgages and home equity loans.

The year-end yield in 1997 was near its lows for the year of 5.87 percent reached only last week. The year’s low, in turn, was the lowest since 30-year bonds yielded 5.82 percent in late October 1993.

Analysts credit relatively low inflation for 1997 and expectations that the economy will continue to grow at a moderate pace without driving prices substantially higher in 1998 for the decline in long-term rates. Turmoil in Asia, which is pushing down the price of imports and forcing U.S. manufacturers to hold the line on prices, also is expected to cool off inflation.

Wednesday’s trading was described as light with many traders taking the day off. Trading ended early, at 2 p.m. in New York, in advance of the New Year’s Eve celebrations. Financial markets are closed today in observance of New Year’s Day.

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

NYSE

Russell, down 1-7/8 at 26-9/16.

The maker of sports-related apparel warned late Tuesday that its fourth-quarter profit will be below analyst expectations. Russell blamed sluggish sales and soft pricing in its Jerzees Division, as well as weak holiday business.

Paragon Trade Brands, down 7-3/8 at 12-7/8.

Procter & Gamble, maker of Pampers and Luvs diapers, won a patent infringement suit against Paragon, which makes private-label diapers. Paragon said liability could be $160 million to $200 million.

NASDAQ

Intellicell, up 1-1/4 at 5.

The distributor of wireless communication products terminated discussions to acquire Pacific Unplugged Communications Inc. and Unplugged de Mexico S.A.

New York Health Care, up 1-3/8 at 2-1/2.

The health care provider said it would repurchase up to $200,000 worth of the company’s stock.

CMC Industries, down 4-15/16 at 5-7/8.

The contract electronics manufacturer is losing its biggest customer, Micron Electronics. CMC assembled, tested and shipped personal computers for Micron.