Dow Rises 11.08; Bond Yields Drop : Market Overview

The stock market recouped some of last week’s losses with a moderate rally led by technology issues.

* Bond yields fell across the board in light trading on last week’s unemployment report and on comments by Rep. Leon Panetta during his Senate confirmation hearing Monday as budget director. The 30-year Treasury bond’s yield fell to 7.44% from 7.47% late Friday.

Stocks

Analysts said investors were having some success trying to bounce back from a series of worries that hit the market as 1993 began.

The Dow Jones average of 30 industrials, down 49.44 points in the first week of the year, rallied 11.08 points to 3,262.75.

In the broader market, advancing issues outnumbered those declining by about 5 to 3 on the New York Stock Exchange.

Big Board volume came to an estimated 217.91 million shares, down from 263.47 million in Friday’s previous session.

Dissipating tensions over Iraq also bolstered confidence. Blue chips fell last week on fears of a new confrontation between the United States and Baghdad over Iraqi missiles in the Western allies’ no-fly zone.

“Today, we’re just taking a breather,” said Tim Heekin, manager of Salomon Bros.’ block trading.

“A lot of things got a little oversold (last week),” he said, noting that technology, utility and drug stocks were among sectors making a comeback.

“I think our market is taking a cue from the bond market,” he added.

* Investors have homed in lately on technology stocks as one likely beneficiary of a stronger economy. In Monday’s Big Board activity, Compaq Computer rose 2 1/4 to 50 1/2; Hewlett-Packard 2 to 72 3/4; Advanced Micro Devices 5/8 to 19 7/8; Texas Instruments 1 7/8 to 56 5/8, and Motorola 3 1/4 to 112 3/4.

* Texas Instruments settled pending litigation with Tandy Corp. over antitrust and patent matters. Tandy’s shares dropped 1 5/8 to 29 1/4.

* Even the battered stock of International Business Machines gained 1 1/4 to 47 3/4.

* In the NASDAQ market, meanwhile, Intel climbed 3 5/8 to 102 3/8; Microsoft 2 to 89 1/8; Apple Computer 1 7/8 to 64 1/8; Novell 1 1/4 to 31 1/2, and Seagate Technology 7/8 to 21 1/2.

Traders will start working their way through year-end earnings reports in the next few days, in what is otherwise expected to be a relatively quiet week for economic news.

Positive reports on inflation are expected, however, in the producer price index of finished goods, due out Thursday, and the consumer price index, slated for Friday release.

Among actively traded blue chips, Eastman Kodak rose 3 1/4 to 45; Merck was up 3/4 to 43 1/4; Philip Morris added 1/8 to 74 1/8, and General Motors rose 7/8 to 34 1/4.

Kodak drew favorable notices from analysts quoted in Barron’s magazine, and also named a new chief financial officer.

* Elsewhere, Sunbeam-Oster Co. fell 7/8 to 15 7/8 after the weekend news that Paul Kazarian had been ousted as chairman.

* Nantucket Industries, traded on the American Stock Exchange, fell 2 1/8 to 12. The apparel producer’s earnings for the fiscal third quarter ended Nov. 28 came to 18 cents a share, against 17 cents a share in the corresponding period a year earlier.

* Calgene, a NASDAQ issue, dropped 1 1/4 to 16 5/8. The company denied reports that Campbell Soup had backed away from its research support of Calgene’s genetically modified tomatoes.

Overseas, share prices fell broadly on the London Stock Exchange in relatively light trading. The Financial Times 100-share average fell 25.8 points to 2,773.4. Tokyo stocks ended down, with the 225-share Nikkei average finishing off 45.14 points at 16,589.55. In Frankfurt, the DAX 30-share average ended 0.44 points higher at 1,531.96.

Credit

The drop in interest rates followed Friday’s government report of worse-than-expected unemployment in December, which led market participants to reconsider the strength of the economic recovery.

The price of the Treasury’s main bond, which rises when yields fall, rose 11/32 point, or $3.44 per $1,000 in face amount.

The federal funds rate, the interest on overnight loans between banks, was 3.063%, up from 2.813% late Friday.

Currency

The dollar declined against other major currencies in generally slow, uneventful trading.

The British pound continued to strengthen against its foreign counterparts. The pound rose to $1.554, compared to $1.532 Friday.

Commodities

Cattle and hog futures prices rose sharply on the Chicago Mercantile Exchange as harsh winter weather posed new threats to livestock production and the movement of animals to market.

Oil futures ended lower on the New York Mercantile Exchange in cautious trading ahead of a U.N. Security Council meeting to consider Iraq’s violation of United Nations mandates. Light, sweet crude oil for February delivery fell 10 cents to $18.78 a barrel.

Market Roundup, D8