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Blue chip break 4-session losing streak

NEW YORK: Blue-chip stocks roared back from a loss of more than 70 points to end one-point higher Thursday as bargain hunters surfaced after four straight sessions of losses.

In the sixth most-active session ever on the New York Stock Exchange, the Dow Jones industrial average closed up 1.09 points at 5,487.07.

But in the broader market, declining issues swamped advances 1,514 to 857 on very heavy volume of 519 million shares on the NYSE.

"The intraday volatility was particularly wild," said Alfred Goldman, technical research director at A.G. Edwards. "We had somersaults all day."

It was a whipsaw session that prompted the NYSE to twice impose and lift trading curbs as the Dow lost more than 50 points early in the day, rebounded partially, then fell again before finally eking out a gain at the end of the day.

The Dow has fallen more than 200 points in a week on concern over the recent jump in long-term interest rates and inflation.

"The bears had their few days of selling and damage. It looks like the sellers got tired and the bottom-fishers came in," Goldman said.

He said the market was still in a correctional phase.

"It's just a normal time-out, not a top-out. We're letting the bull work off excesses," Goldman said.

The market's recovery was aided by a late retreat in bond interest rates. The yield on the 30-year Treasury bond fell to 6.94 percent from 6.95 percent on Wednesday.

"Stocks are very nervous looking at the yield on the 30-year bond," said David Westhouse, head trader at PTI Securities.

Wall Street also was skittish amid soaring commodities prices. The Commodity Research Bureau index of 17 commodity futures rose to an eight-year high of 261, boosted by higher energy and grain prices.

Traders also were trying to assess how much further stocks may fall after the Dow index sank nearly 4 percent in four trading sessions.

"You wonder is this it? Is this the 10 percent plus correction? We do have the ingredients of rising interest rates, rising inflation and slowing earnings growth," said Robert Stovall, president of Stovall/21st Advisers.

Ricky Harrington, technical analyst at Interstate/Johnson Lane said, "Psychology has turned and it will take more than a 4 percent pullback to correct the excesses of the past 18 months."

Meanwhile, the Labour Department reported a slightly bigger than expected rise in wholesale prices in March. It said the Producer Price Index rose 0.5 percent, compared with a 0.2 percent decline in February.

On Friday, the government will report the Consumer Price Index for March and retail sales.

Among individual issues, Lowe's Cos. shed 3-1/4 to 30 after reporting an 8 percent drop in March same-store sales and warning that its first-quarter results would fall shy of expectations.

Sallie Mae lost 2-1/4 to 74-1/2 after posting disappointing first-quarter results.

Talbots lost 5-1/2 to 29-1/4 as its March same-store sales slumped 7.2 percent.

J.P. Morgan fell 2-1/8 to 77 despite reporting stronger-than-expected first-quarter earnings.

Altera dropped 12-3/8 to 49-1/8. The maker of programmable logic devices said orders in recent weeks have fallen, prompting Wall Street firms to downgrade the company.

Applewoods, a maker of natural soaps and oils, jumped 9-1/4 to 14-1/4 in its first day of trading.

Sinclair Broadcasting rose 5 to 32-1/2 after news it agreed to acquire River City Broadcasting for $1.2 billion.

The Standard & Poor's composite index of 500 stocks fell 2.32 to 631.18. The American Stock Exchange index was up 0.23 to 570.19.

The NYSE Composite index of all listed common stocks fell 1.55 to 339.38. The average share was down 18 cents.

The Nasdred ahead to new eight-year highs, analysts said.

Fueled by talk of precariously low stockpiles, grain prices at the Chicago Board of Trade and oil prices at the New York Mercantile Exchange posted new life-of-contract highs in most delivery months. Copper and cocoa prices also rose.

Together the gains led the Knight-Ridder Commodity Research Bureau index of 17 commodity futures to a high of 260.69, up 1.78 points -- a sixth straight day of new eight-year highs.

Grain prices have been rising since late 1994, as crop failures overseas boosted demand for U.S. grains at a time government policies had steadily shrunk grain stockpiles.

Exports have boomed amid growing worries this year's crops, seen vital to rebuilding stocks, will be shrunk by bad weather.

Agriculture Secretary Dan Glickman told reporters on Thursday that grain stocks, while low, would neither prompt an embargo of exports or any danger of not meeting food needs.

"Everybody should relax. We are in no emergency whatsoever," he said. "We have tight markets. The market place will do its job in allocating supplies."

At the Chicago Board of Trade, wheat futures jumped an expanded 30-cent per bushel trading limit on the USDA news. New life-of-contract highs were set across the board in corn and soybeans. But massive profit taking cut all gains by the close.

CBOT May wheat closed at $5.63-1/2 a bushel, up 13-3/4 cents, after its new contract high at $5.79-3/4.

The retreat in wheat combined with forecasts for beneficial rains due this weekend in the Midwest corn belt to also trigger heavy profit-taking in corn and soybeans.

May corn closed at $4.44-1/2 a bushel, unchanged, after setting a new contract high at $4.55-1/4 early.

That price was a record corn price at the 148-year-old Chicago Board of Trade for the seventh straight day.

Soybeans closed lower after contract highs were set across the board early. May soybeans closed at $7.88-1/2, down six cents, after a new high at $8.06 a bushel.

During the day, meterologists said rains will help corn prospects ahead of Midwest planting this month. But drought-like conditions in Kansas and other states still plague winter wheat.

In New York, crude oil and refined product futures set new contract highs as worries about very low stocks heading into the summer travel season in the United States buoyed prices.

News that United Nations talks with Iraq on allowing Iraqi oil exports to resume also aided bullishness.

May crude oil closed up $1.13 at $25.34 a barrel, just off its new high of $25.45. May heating oil also set a new high of 64.70 cents, then eased to 64.02 cents, up 1.51 cents.

May unleaded gasoline closed at 74.30 cents a gallon, up 1.31 cents, after setting a new high at 74.90 cents a gallon.

Stocks of crude, gasoline and distillates in the U.S. stand at or near the lowest levels in two decades despite high OPEC production as oil companies opt to cut costs by running stocks as low as they believe their systems can tolerate.

COMEX copper closed higher on short covering fueled by talk of a large LME stock drawdown Friday, traders said.

May COMEX settled 3.40 cents higher at 118.80 cents per lb.

"There is talk about a lot of LME stock coming out of Singapore which would indicate good Asian buying," said analyst Mike Frawley of Dean Witter Reynolds.

The drawn-out labor talks at Chuquicamata mine and physical tightness in the United States were also on traders' minds.

Cocoa futures closed sharply higher on speculative buying on ideas the U.S. first quarter grind due April 19 will be strong.

May cocoa closed $26 higher at $1,339 a tonne.-Reuter