Like Christmas sales that begin in October, Wall Street`s traditional Santa Claus rally is getting a bit ahead of itself.
The Dow Jones industrial average climbed 18.65 points Monday to close at 3307.33 on the New York Stock Exchange. It was the second time this month that the Dow industrials closed above 3300. Broader market indexes climbed, too, with records set by the Standard & Poor`s 500 index and the Nasdaq composite index.
Friday`s report of a rebound in payrolls again set the tone for stock trading Monday.
Ironically, the Big Board`s most actively traded stock was American Express, where the chief executive officer is losing his job after 15 years. The company announced Sunday that CEO James Robinson, long an object of derision in the financial press, will step down when his successor is named. Robinson stressed that he wasn`t being fired. But his company`s stock climbed $1.37, to $24.75, on the news.
Oil stocks climbed on a favorable report by Wertheim Schroeder. The report suggested that lagging oil company stocks were due for a rebound. Among them was Chicago-based Amoco, which closed up $1.37, to $49.25.
Big-name drug stocks, which also have lagged the recent rally, climbed Monday, led by Merck.
Bond prices rallied again on evidence of low inflation and an apparent belief that an economic recovery under way will make Bill Clinton less likely to seek inflationary economic stimulus.
The benchmark 30-year Treasury bond yield, moving opposite to price, closed at 7.45 percent, down from 7.48 percent Friday and the lowest level since early October.
Bond traders sense the Federal Reserve is unlikely to raise short-term interest rates soon, despite reports of a strengthening economy. They also express satisfaction with the status-quo complexion of Clinton`s rumored economic policy appointees.
That whirring . . .
. . . sound you hear may be the grinding of an overheated stock market. It`s not the sound of American Dental Laser`s kenetic energy-based substitute for traditional dental drills.
The company says the device operates without friction, and so did trading in American Dental shares in the last two days, since the Food and Drug Administration permitted the company to market the product.
In Nasdaq trading Friday and Monday, the stock soared $6.12, to $9.75. Officials of the Troy, Mich.-based company caution that initial sales will be slow. Analysts, noting that the company expects to lose $10 million this year, say the rush into the stock might be followed by the same feeling you get when the Novocain wears off after a wisdom-tooth extraction.
Dental gear is hot these days. Des Plaines-based Gendex, a maker of traditional dental handpieces and dental X-ray equipment, shot up $1.25, to $44.25.
Local news
– ServiceMaster L.P., the diversified industrial and consumer service firm offering everything from food service to pest control, plans to offer 3 million non-voting shares in a newly formed corporation. The shares are designed to appeal to institutional investors.
Downers Grove-based ServiceMaster is organized as a limited partnership, a structure that pension funds and other institutional investors eschew. ServiceMaster plans to revert to a traditional stock corporation in 1997.
In the meantime, the new entity, ServiceMaster Corp., plans to offer 2 million shares to the public. ServiceMaster Corp. would be a ”special general partner” of ServiceMaster L.P.
In addition, certain holders of limited partnership shares, who weren`t identified in the preliminary prospectus filed Monday with the Securities and Exchange Commission, would exchange their limited partnership shares for 1 million of the new non-voting corporation shares.
– Local stocks hitting 365-day highs in Monday`s rally included Motorola, Zebra Technologies and American Colloid.
