NEW YORK, JULY 24 -- The Dow Jones industrial average fought back pessimism about the economy and rallied 17 points at the close today, largely on the strength of rising oil issues.
But the broad market, as measured by larger equity indexes and New York Stock Exchange advance-decline statistics, languished amid evidence that caution checked any aftermath of Monday morning's 108-point plunge, with declining issues outpacing advancing ones by a margin of 4 to 3. The over-the-counter market in particular, ignoring the rebound by the blue-chip Dow, continued to retreat.
Much of the Dow rally was attributable to strength in its oil components amid heightened tensions in the Persian Gulf, where Iraqi troop concentrations have been reported on the Kuwait border. Texaco surged 2 3/4 to 62 1/2, Exxon gained 2 1/8 to 50 and Chevron tacked on 1 7/8 to 78 3/4.
Throughout the day, reports of poor earnings and downgraded earnings projections continued to jolt a jittery market, with disastrous effects on individual stock prices.
Dow Chemical, Capital Cities/ABC, and the American depositary receipts of Reuters Holdings PLC were today's prominent victims of the kind of urgent selling that recently thrashed such other issues as Apple Computer, Lotus Development and McDonald's.
Dow Chemical led the NYSE actives with a sharp, 5 3/4 loss to 52 3/8 -- a nearly 10 percent drop -- after the company reported a 50 percent drop in second-quarter net earnings.
Capital Cities/ABC fell 55 1/2 to 533 -- a tumble of more than 9 percent -- on general disappointment that earnings were not better.
The U.S issues of Reuters also plunged, down 10 at 56 1/4 for a hefty 15 percent loss after a similar pummeling in London. Although Reuters reported a 23 percent increase in pretax earnings, the company warned of possibly lower results for the second half due to contract cancellations.
At the close, the Dow stood at 2922.52, up 17.82, on moderate volume of 181 million shares.
Traders continued to trade heavily today in issues of two quasi-government corporations, the Student Loan Marketing Association (Sallie Mae) and the Federal National Mortgage Association (Fannie Mae) in response to troubles in the student- and home-loan markets.
Sallie Mae had dropped 17 percent in two sessions when trading was halted at 11:27 a.m. today because of order imbalances. The halt came amid mounting concerns that the Higher Education Assistance Foundation (HEAF), with $9.6 billion in student-loan guarantees, is facing serious financial problems. Trading resumed after the government announced it would find other organizations to take up HEAF's loan portfolio, and Sallie Mae shares rallied to finished the day off only 1 3/4 at 48 1/8.
Fannie Mae, meanwhile, dipped 1 3/8 to 38 1/2 amid the generally uncertainties surrounding publicly traded federal financial agencies.
General Motors lost 5/8 to 47 7/8, Ford eased 1/2 to 42 3/8, while Chrysler gained 1/8 to 15 7/8 despite a 17.9 percent decline in 10-day sales.
The Dow transports closed up a mere 1.83 at 1137.96, also trailing the industrials badly, while the utilities posted an inconsequential gain as well, up 0.19 at 200.39.
Among broad stock indexes, the Standard & Poor's 500 rose only 0.48 to 355.79, equivalent to about a 3-point gain on the Dow. The NYSE Composite was up 0.23 at 280.29, the NYSE Composite rose 0.23 at 194.45, the Value Line gained 0.23 at 280.29 and the Amex Market Value added 0.59 at 355.51. The Nasdaq Composite didn't even try to keep pace with the Dow, slumping 2.08 to 442.56.