NEW YORK, AUG. 8 -- The Dow Jones industrial average rallied 24 points today on a combination of occasional program buying and a consistent undercurrent of bargain hunting, with many traders concluding that the market has already discounted the worst news from the Middle East.
A skid in oil prices reinforced that view, as did a televised address and subsequent press conference by President Bush.
Moreover, the arrival of the first U.S. military aircraft in Saudi Arabia, and increased concentrations of U.S. naval strength in the Persian Gulf and Red Sea suggested that, militarily, the window of opportunity is rapidly disappearing for Iraqi leader Saddam Hussein's forces to overrun Saudi oil fields.
Today's gains were the market's first in six sessions. Traders were cheered despite a sharp drop in volume, only moderately positive breadth and the fact that the Dow has retraced only about 13 percent of its steep losses since Iraq invaded Kuwait a week ago.
At the close, the Dow stood at 2734.90, up 24.26, while advances outpaced declines by nearly 2 to 1 on moderately active volume of 190 million shares.
Oil stocks fell almost across the board, while the recession-defensive groups that have been hard hit since last Thursday enjoyed widespread rebounds. Texaco slumped 1 7/8 to 62 3/4, Exxon fell 1 5/8 to 51 3/4, and Chevron gave up 1 3/4 to 76 7/8 as New York September crude-oil futures dropped $2.35 to $25.96 per barrel.
The Dow's conspicuous gainers were the consumer stocks that have suffered most in the last four sessions from perceptions among domestic institutions that a combination of recession and oil-driven inflation would undermine these recession-resistant holdings. Those fears were overcome by bargain-hunting zeal today as Procter & Gamble rallied 2 3/4 to 80, Merck gained 2 1/8 to 85 1/8, Coca-Cola rose 1 5/8 to 44 and Woolworth added 1 1/2 to 28 7/8.
The Dow transports rose 26.64 to 991.43, outdistancing the industrials, as airlines rallied on perceptions of falling oil prices as well as prompt steps taken by air carriers to pass increased fuel costs on to their customers.
The Dow utilities rose 1.13 to 205.55 as the bond market bounced back to neutral from its half-point midafternoon skid.
Among broad stock indexes, the Standard & Poor's 500 was up 3.52 at 338.35, the NYSE Composite up 1.95 at 185.40, the Value Line up 2.75 at 263.24, the Amex Market Value up 0.19 at 340.03, and the Nasdaq Composite up 5.65 at 407.73.