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Optimism Extends Winning Streak

Associated Press

Hope that interest rates soon will stabilize rather than head higher propelled stock prices aloft Monday for a second straight session.

The Dow Jones industrial average closed at 3,932.34, adding 23.88 points on top of Friday’s nearly 50-point surge. It was the best finish for the blue-chip indicator since Oct. 19 when it hit 3,936.04.

Other popular stock gauges also gained. The New York Stock Exchange composite index climbed 1.86 to 255.81 and Standard & Poor’s 500 stock index rose 3.41 to 469.38. The Nasdaq Stock Market composite rose 6.00 to 768.16 while the American Stock Exchange market value index increased 1.40 to 437.53.

Gainers beat losers by about 9 to 5 on the Big Board where trading was active despite the Martin Luther King Jr. holiday. The bond market and many banks and government offices were closed.

Volume on the NYSE floor came to 314.80 million shares as of 4 p.m. compared to 336.46 million Friday.

Friday’s rally was fueled by signs that the Federal Reserve Board’s campaign to control inflation by subduing economic growth might be working.

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

NYSE

Quaker Oats, down 2 7/8 to 33 1/4 in heavy volume of more than 2 million shares.

Investors dumped the stock after NatWest Securities Corp. and Salomon Brothers Inc. downgraded its rating. The stock retreated from levels reached last week on rumors that Coca-Cola Co. or another suitor might make overtures for Quaker Oats.

Deere Co., up 4 1/4 to 74 1/2.

The stock’s investment rating reportedly was raised to “buy” from “market performer” by Oppenheimer & Co.

Citicorp, up 7/8 to 41 1/2 in heavy volume of more than 2.8 million shares. Bank stocks attracted attention as investors prepared to review quarterly earnings statements.

NASDAQ

Microsoft, up 1 3/8 to 64 1/8 in Nasdaq-leading volume of more than 4.6 million shares

Estimates of the software maker’s earnings this year and next were raised by Merrill Lynch & Co.

AMEX

Turner Broadcasting System, class B, down 1/8 at 17.

Turner said it had “discontinued discussions about possible business combinations with NBC due to the issue of ownership and control.” The cable network owner had been talking for several months about buying NBC from General Electric Co.