All,
Below is Larry Wachtel's closing stock market commentary (8/18) for your evening entertainment:
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Closing Stock Market Commentary
brought to you by Larry Wachtel.
This commentary, edited for use on the Internet, is
broadcast on New York radio (station WINS, 1010
AM). Please note that securities mentioned within
this commentary should not be considered as
recommendations and are for informational
purposes only.
August 18, 1997, 5:10 p.m. EST
DJIA 7803.36 +108.70
A funny thing happened on the way to the crash. After Friday's 247 point Dow shakeout, the weekend media carried forward the dire warnings about blue Monday. But Wall Street has caught on to the Dow and the programs, and concluded there was less than meets the eye. The morning was steady to non descript and after some downside probes through the day, the final hour saw buy programs activated with the Dow moving up 108 points through the day. In other words, the same derivative activity that triggered the double witch close out selling on Friday saw the derivative buying that spurred the Blue Chip Index.
Beyond the Blue Chip Index snapback we also saw the broad list come back with a slight plurality of losers to winners. NASDAQ showed some minor gains while big board volume was heavy for an August, Monday at 518 million shares.
Bonds rallied through the day, with the long-bond yield falling five basis points to the 6.51% level. Through most of the session the buyout treasury market felt some crossover from investors coming out of consumer stocks. Late in the session any residual concern about the Federal Reserve strategy meeting tomorrow faded when a Reuters poll of 35 economists showed a unanimous view that the central bank would not be changing policy. Moreover, only five of the group believe the Fed will make any changes at the September 30th meeting.
Among the Dow Blue Chips, IBM led the pack with a four point gain. Other big winners were General Electric, Exxon, Johnson & Johnson, Alcoa, Dupont, and Disney. Hewlett Packard was the weak Dow component falling over two-points after missing the quarter. Procter & Gamble and Allied Signal were also easier.
Exxon led a strong oil group rising over three points. Texaco gained a point after the oil company said it will buy Montery Resources, an independent oil and gas producer.
Cardinal Health gained two points after a Morgan Stanley upgrade. Amlyn Pharmaceutical was the big loser, falling seven points after the company announced some negative results for its Diabetes drug.
Andrea Electronics fell over three points on product developments while Benthos gained over eight points after a favorable mention in Barrons.
The dollar rose against the mark after a German Central Bank official squashed expectations the Bundesbank will raise rates soon to defend the Mark. The Bundesbank member said German growth is too slow to warrant higher rates.
It may be hazy, hot, and humid but the bull has come out of the bullpen. The biggest bull market in history dies hard.
Ibexx |
