Stocks Withstand Bond Price Jump
Stocks withstood a big jump in bond market interest rates Thursday, ending mixed, with smaller and more speculative shares showing more strength as traders looked for ways to reinvest profits from blue chips.
The Dow Jones industrial average rose 14.16 at 6,437.10, ending a two-day losing streak that had erased about 100 points of the Dow’s nearly 500-point November gain. Broader measures were mixed, but little changed. The Nasdaq market rose for the eighth time in nine sessions.
Although the two-day tide of profit-taking slowed in stock trading, bonds fell sharply again as investors locked in gains on the Treasury market’s advance in recent months.
As bond prices fell, the yield on the 30-year Treasury bond shot up to 6.50 percent from late Wednesday’s 6.39 percent. The yield, which hit a nine-month low last week, hasn’t finished a day that high since Nov. 12.
Some of the stocks that moved substantially or traded heavily Thursday:
NYSE
Santa Fe Pacific Gold, up 3 to 14-7/8.
Newmont Mining offered to acquire Santa Fe Pacific for $2.04 billion in a deal that would form the largest gold production company in North America. Santa Fe Pacific Gold had no immediate comment on the offer of 0.33 share of a Newmont share for each Santa Fe Pacific share.
Chrysler, up 7/8 at 35-7/8
The automaker increased its annual dividend by 20 cents to $1.60 a share and doubled its stock repurchase program for 1997 to $2 billion. Chrysler agreed earlier this year to increase the size of the buyback program in a truce with billionaire investor Kirk Kerkorian, who had tried to buy the company.
NASDAQ
Tele-Communications, up 1/2 at 13-5/8.
The nation’s biggest cable system operator is planning to eliminate more than 2,500 jobs and reduce senior executive salaries to reduce expenses. The news comes one day after TCI’s board decided to move ahead with plans to spin off its Liberty Media programming arm and its international business unit to stem losses and boost TCI’s stock price. On Wednesday, Englewood, Colo.based TCI completed the spinoff of its direct satellite television subsidiary.
Barefoot, up 2 19/32 at 15 11/32.
ServiceMaster agreed to acquire the provider of lawn-care services for $16 a share, or about $230 million. Barefoot shareholders will have the option of receiving cash or an equivalent amount of ServiceMaster shares in the deal. Barefoot is based in Worthington, Ohio. ServiceMaster, based in Downers Groove, Ill., provides cleaning, lawn-care and other services.