Stocks Gain Ground As Dollar Firms

Stocks rose on Wednesday, as comments by Federal Reserve Chairman Alan Greenspan sparked at least a temporary rally in the dollar.

The Dow Jones industrial average added 16.60 to close at 3,979.23. The blue chip index had lost nearly 35 points on Tuesday as the dollar sank to new lows against the Japanese yen and the Deutsche mark.

On Wednesday, the dollar improved against other major currencies after Federal Reserve Chairman Alan Greenspan told the House Budget Committee that the dollar’s sharp drop was “unwelcome and troublesome.”

Stocks opened higher as the dollar firmed, backed off a little, but then resumed climbing in late morning and never looked back.

The improved dollar also pushed bond prices higher, which helped boost stocks. The 30-year bond was up nearly a point in late trading.

Advancing issues outnumbered decliners by 1,129 to 1,052 on the New York Stock Exchange, with 780 unchanged. Big Board volume was moderate at 349.7 million shares as of 4 p.m., down from 355.53 million Tuesday.

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

NYSE

Toys R Us fell 1 3/4 to 25.

The toy retailer said 1995 earnings would not be above $2 per share, citing price reductions. Fourthquarter net earnings were $1.46 per share, up from $1.27 a year ago and in line with analysts’ expectations.

Barrick Gold fell 7/8 to 22 3/8.

Homestake Mining fell 1 to 16 1/4.

Placer Dome fell 3/4 to 21 1/8.

The price of gold dropped as the dollar improved. Gold had shot up earlier in the week as investors fled to the safe haven commodity when the dollar plunged.

Compaq fell 1 1/4 to 32 7/8.

The computer maker cut prices on its new ProLinea and Deskpro lines and unveiled 118 new models.

NASDAQ

Microsoft rose 3 5-32 to 68 1/2.

The software company, along with the Justice Department, appealed a U.S. district court’s rejection of their antitrust settlement.

Lin Broadcasting fell 7 1/4 to 121.

An independent appraiser said AT&T must spend $127.50 per share, or $3.26 billion, to acquire the 48 percent of Lin that it doesn’t already own. AT&T was up at 51 on the New York Stock Exchange.

AMEX

Echo Bay fell 1/2 to 9 3/8.

Royal Oak Mines fell 1/8 to 3 3-16.

Gold stocks declined after a big runup in gold prices ended.