A rally in computer-technology stocks and a favorable reception for the Treasury’s monthly auction of five-year notes pulled Wall Street back Thursday from a two-day slump.
The auction of $12.5 billion in five-year Treasury notes brought a lower-than-expected yield of 6.56 percent, which indicated upbeat investor demand.
The Dow Jones industrial average added 19.58 points, to 5693.41 on New York Stock Exchange volume of 329 million shares. Broader indexes also posted gains as advancing issues led losers by 13-to-9 among NYSE-listed stocks.
The Nasdaq composite index added 7.85 points, to 1233.48.
International Business Machines and Texas Instruments were among the big-name computer-technology stocks that posted gains on the NYSE. Intel and Microsoft did the same on the Nasdaq market. The index of technology stocks at the Chicago Board Options Exchange added 2.05 points, or 1.2 percent, to 172.34.
Software developer Borland International sank $3.75, to $13.37, after the company said late Wednesday that its fiscal first-quarter loss may be greater than Wall Street expects. The company blamed weak sales of its desktop software.
Lower commodity prices and a downward revision of first-quarter economic growth helped give the bond market a positive tone after Wednesday’s slump. The Knight-Ridder/Commodity Research Bureau’s index of commodity futures prices fell 1.62, to 252.25.
Shares of Israeli companies that trade in the United States slipped–but did not collapse–after indications that conservative candidate Benjamin Netanyahu defeated Shimon Peres in Wednesday’s election for prime minister of Israel.
The American depositary receipts of Koor Industries, a major Israeli manufacturing conglomerate, fell 62 cents, to $18.12, on the NYSE. Teva Pharmaceuticals lost $1, to $44.87, on the Nasdaq Stock Market.
Earlier on Thursday in Israel, stock prices that had risen steadily before the election fell back. There was no trading on Election Day. The Maof index of 25 blue-chip stocks slid 9.72 points, to 214.12, from Tuesday’s close.
Adam Schor, co-manager of the Chicago-based Growth Fund of Israel, said he believes a Netanyahu victory should not spell trouble for Israeli investors, at least as far as economic policies are concerned.
“In fact, Mr. Netanyahu’s economic policies are very close to Mr. Peres’,” he said. Regarding politics, Schor said he believes the process of cementing peace with the Palestinians “appears to have a life of its own” and should continue because of its economic benefits to all sides.
A maturing market: Many investors refer to Mexico as an emerging market for stocks. In Mexico, they like to think of it as a maturing market.
Manuel Robleda, president of the Bolsa Mexicana de Valores (the Mexican Stock Exchange) said in Chicago on Thursday that despite the economic and financial shock caused by Mexico’s currency devaluation in December 1994, foreign investment in Mexican stocks has been stable for nearly four years at just under 30 percent of total market capitalization.
“Some foreign investors left, but others came in to replace them,” Robleda told a press briefing at the CBOE, which in conjunction with the Chicago Mercantile Exchange launched options and futures on the Mexican Stock Exchange’s IPC blue-chip stock index.
In recent months, he said, foreign investment has been accelerating as the economy shows signs of turning the corner from a recession and Mexico’s inflation heads lower, Robleda said.
The nation’s gross domestic product in the first quarter declined at a 1 percent annual rate, bettering forecasts of a 2 percent or 3 percent decline. Several components of GDP, notably mining and manufacturing, posted healthy gains. Industrial production rose 4.1 percent in February. Short-term interest rates have dropped to about 25 percent from 48 percent at the end of last year.
A major goal for the country is to increase individual savings, Robleda said. The government recently began a program of individual retirement accounts, he said.
The growth of futures and options linked to Mexican securities and the peso is part of the maturing process, Robleda said. By this fall, the Mexican Stock Exchange hopes to be trading futures and options on the IPC index that will settle in pesos. The IPC index futures and options that began trading Thursday in Chicago–the first such linkage of the IPC index with a non-Mexican financial institution–settle in dollars.
Local news: Chicago-based regional telephone company Ameritech lost $1.87, to $57.12, on news that AT&T may be mounting a price war with Ameritech in Illinois. Likewise, AT&T dropped $1.25, to $62.87.
– Elgin-based Safety-Kleen, an environmental-services firm, told Dow Jones News Service that it was comfortable with analysts’ estimates of 22 cents per share to 24 cents per share for the company’s second-quarter earnings, up from 21 cents a year ago. Lawrence Rudnick, treasurer, said he knew of no particular reason for the spurt in the company’s stock price over the last two days. The shares added $1.37, to $17, in Thursday’s trading. They had closed at $14.50 Tuesday.
– AptarGroup, a maker of packaging components based in Crystal Lake, will be added to the Standard & Poor’s SmallCap 600 index, replacing Chicago-based N.S. Bancorp, which was acquired by MAF Bancorp in Clarendon Hills.
