WALL STREET Late recovery

Press, 27 January 1986, Page 12

WALL STREET Late recovery

After substantial falls the first few days of the week the Wall Street stock market staged a recovery towards the close, and the Dow Jones index of industrial shares finished last week at 1529.93 for a gain of 0.80 points compared with the previous Friday. Investors clamoured to purchase the stocks of companies that could benefit from the recent plunge in oil prices, analysts said. The buying-binge spilled over into other segments of the market, too. “Upon reflection, everybody has finally realised the positive impact lower oil prices will have on the economy,” said Charles Jensen, chief technical analyst for MKI Securities Corporation. Earlier in the week, traders worried that weak energy prices would undermine the financial health of oil companies and banks that are carrying loans backed by en-ergy-related assets. On Tuesday and Wednesday, traders sold off stocks of banks and oil concerns. Oil prices are now about 35 per cent below November levels. Michael Metz, a vice president at Oppenheimer and Co. in New York, said petroleum prices have fallen so rapidly the oil

market is chaotic, something that has unnerved stock traders trying to sort out all the possible consequences of lower oil prices. “The stock market is still trying to adjust to the free-fall in oil prices, and even stocks that should benefit if the cuts in crude are passed on to fuel buyers have not responded all that favourably,” Mertz said. For instance, airline stocks have not been significantly buoyed, partly because the major carriers are waging a war for passengers, including fare discounts which could hurt their profits. The market also reacted favourably to the latest economic statistics. Strong growth in the United States personal income and spending during December provided evidence the economic expansion picked up steam at the end of the year, analysts said. The United States Commerce Department reported on Friday that Americans’ personal income rose 1.4 per cent in December — the biggest increase in almost two years — while personal spending shot up two per cent, the fastest clip in more than a decade. Elliott Platt, research director for Donaldson, Lufkin and Jenrette Securities Corporation, said the new figures imply that December was a month of solid economic growth and that the current quarter’s growth rate will surpass the fourth quar-

teris sluggish 2.4 per cent pace. Closing prices in U.S. dollars on Friday of a selection of issues were: Alcan, 30%; Alcoa, 39%; Amerad Hes, 24%; Am Express, 54%; Am Motors, 2%; ATT, 22%; Armco, 10; Asarco, 20; Atl Rich, 55%; Beth Stl, 17%; Boeing, 47%; Borden, 51%; Burroughs, 65%; Chrysler, 43%; Citicorp, 49%; Coca Cola, 80%; Colgate, 32%; CBS, 113%; Conti Grp, 44%; Crane, 39; Dar and Krft, 39%; Digital Eq, 151%; Disney, 117%; Dome Mines, 11%; Dow Chem, 41; Du Pont, 61%; East Kodak, 6%; Englhrd, 25; Exxon, 50%; Firestone, 24%; Fluo, 15%; Ford, 59%; Frpt McMor, 17; Gen Dynam, 68%; Gen Elec, 68%; Gen Motors, 70%; Gen Tire, 68%; Goodyear, 31%; Greyhound, 31%; Grumman, 28%; Gulf OU, 50%; HaUburton, 25%; Homestake, 26%; Honeywell, 73%; IBM Corp, 150; Inti Harv, 9; INCO, 14%; Intl’l T and T, 36%; Lockheed, 46%; Manville, 7; Jhsn and Jhsn, 50; Kaiser Alu, 16%; K-Mart, 35%; McDonald’s, 74%; McDon Doug, 74%; MGM, 23%; M-M-M, 86%; Mobil, 29%; Monsanto, 46%; NCR, 42; Newm Mln, 50%; Pfizer, 47; Phel Dodge, 24%; Phil Pet, 11%; Polaroid, 47%; RCA, 61%; Raytheon, 54%; Reyn Metal, 38%; Royl D Pet, 62%; Seagrams, 45%; Seas Roe, 37; Shell Tr, 37%; Sperry Cp, 47%; Chevron, 36%; S Oil Ohio, 46%; Texaco, 28%; Texas Inst, 107%; Union Carb, 82%; US Steel, 23%; Westg Elect. 44%; Wwths, 60%; Xerox, 58%; Schlumberger, 32%; Merryl Lynch, 40%; Occidental, 28%; Heinz, 29%; Clevel’d Cliff, 19; Internorth. 44%; Amer Airlines, 47%.