New York, June 5: Wall Street staged a rally in the last half hour of trading to end the day on a positive note for blue chips. After getting bogged down early in the day, the Dow Jones index of 30 blue chips spiralled upward just as trading ended to close up 66.76 points (0.76 per cent) to end the day at 8,870.55. A total of 572.6 million shares changed hands. Gainers outpaced losers by a margin of 1,626 to 1,238 with 618 unchanged. On the bond market, the average yield of the Treasury's benchmark 30-year bonds rose to 5.81 per cent up from 5.778 per cent on late Wednesday after the Bank of England surprised traders by raising interest rates. Traders ignored news that first-time claims for unemployment rose by 30,000 for the week, against a decline of 2,000 that had been expected.Traders are also anticipating the release on Friday of US unemployment figures for May. Analysts are predicting the jobless rate will rise to 4.4 per cent with 225,000 new jobs created.
High tech stocks led Wall Street's rise,spurred on by a rebound by Intel, which had lost 4.8 per cent of its value on rumors that it planned to put out a warning on its second quarter results.
On the electronic Nasdaq Exchange, DSC Communications gained 39.7 per cent on news that it was being taken over by the French group Alcatel Alsthom for US$ 4.4 billion. Alcatel dropped 10 per cent.
Europe rises on Wall Street rebound
The price of shares on leading European stock markets rose early on Friday, in the light of a last-minute rebound on Wall Street, which took the US market higher overnight. The FT-SE 100 index of leading shares rose by 33.4 points to 5,893.9 points.
In Paris, the CAC-40 index opened 31.01 points higher at 4,150.04 points. And in Frankfurt, the DAX-30 index opened 43.35 points higher at 5,648.73 points. Dealers said that Wall Street had provided the main impetus for trade. On the London market, volume was extremely light, as dealers assessed the impact of a surprise rise in British interest rates announced by theBank of England on Thursday. The central bank raised its base rate by 0.25 percentage points to 7.50 points, citing inflationary pressures caused by an increase in average earnings here. Traders said that the main focus for trade would be publication of US non-farm payroll data for the month of May later in the session. Pharma stocks were in demand after Astra said it hopes to take control of its US joint venture with Merck.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
