NEW YORK, JUNE 27 -- The Dow Jones industrial average shrugged off disappointing earnings news from AT&T today and got an afternoon boost from computerized program trading, ending the day up 19 points.
The Dow began the day down 9 following disappointing earnings projections by AT&T, one of the most widely held stocks in the market.
Trading was described as extremely thin after allowing for more than 10 million shares of Big Board trading in AT&T as well as a sizable slice of volume for program trading.
Despite the news, AT&T was able to open without a trading delay, down 3 points, and began trimming its losses almost immediately.
The recovery, combined with a midday rally in the bond market, translated into higher premiums on stock index futures and resulted in at least four waves of program buying between 11 a.m. and the close. Particularly thin trading conditions in the cash market helped exaggerate the effects of afternoon buy-programs, traders said.
At the close, the Dow stood at 2862.13, up 19.80, while advances outpaced declines on the Big Board by a ratio of about 8 to 5 on moderate volume of 146 million shares.AT&T accounted for 10.1 million shares of NYSE trading, almost 7 percent of the total, down 2 1/8 at 39 1/8.
Technician Paul Kronlokken at Piper Jaffray and Hopwood said that ''There were individual stocks for sale today, but there was no real feature in the market.''
Institutional trader Lawrence Greenwald at Sanford C. Bernstein concurred that the market's movements today have betrayed no clear sense of near-term direction.
''What it really boils down to is there's no reason for a lot of people to 'play' right now,'' he said. ''Corporate earnings are on everyone's mind, but hard results won't be available until mid-July for a lot of companies,'' he argued.
Drug stocks, which have been in favor with analysts, posted solid gains. Bristol-Myers Squibb added 2 to 68 3/8, Merck gained 1 5/8 to 84 1/4, Johnson & Johnson rose 1 3/4 to 66 5/8 and Warner-Lambert jumped 1 5/8 to 64 1/8.
In sympathy, shares of hospital operator Humana surged 3 points to close at 48 1/2.
The Dow transports rose 5.11 to 1140.88, while the utilities did better, gaining 1.70 to 208.63. The utility index has been unusually volatile lately, traders said, as perceptions have flip-flopped over possible changes in Federal Reserve policy.
Among broad stock indexes, blue-chip measures outperformed those of secondary stocks. The Standard & Poor's 500 was up 3.08 at 355.14, the NYSE Composite up 1.40 at 193.87, the Value Line up 1.03 at 283.81, the Amex Market Value up 0.25 at 357.05 and the Nasdaq Composite up 1.51 at 454.89.