NEW YORK, NOV. 26 -- The Dow Jones industrial average advanced 5 points today after shrugging off the effects of another $1 increase in the price of oil.
The rebound from a sharp, 30-point morning sell-off occurred in tandem with a spirited rally in the U.S. bond market. But while bonds were underpinned in their afternoon rally by several factors related to this week's Treasury auctions, stocks appeared to lack conviction.
Oil prices, driven by war fears, jumped as much as $2 per barrel in New York futures trading before easing, closing at $32.95, up $1.05.
Traders said market enthusiasm was also dampened by news of the details of the MCA Inc. buyout by Japanese electronics giant Matsushita Electric. The selling price appeared to reinforce perceptions that MCA was eager to sell out before the effects of a major recession began whittling down the company's estimated worth. "At the very least, it's a big change from 1988-89, the heyday of leveraged buyouts," said technical trader Gail Dudack at S.G. Warburg. "What appeared to be a buyer's market in this case is yet another indication that times have changed."
At the close, the Dow stood at 2533.17, up 5.94, while advances edged declines on the Big Board on relatively light volume of 131 million shares.
MCA, easily the most active issue, finished the session down 1/4 at 65 1/8 with over 3.2 million shares traded on the New York Stock Exchange, while trading elsewhere added nearly another million shares to the total.
Among other prominent issues, Boeing once again came under selling pressure from the outset, falling as low as 42 3/4 before rebounding to settle down 1 at 43 5/8. Block traders said they knew of no major research released today, like the downgrade from Goldman Sachs that slapped the stock down 4 3/4 points last Tuesday.
"It does show the unforgiving nature of this market," said Dudack. "People are still trying to 'talk' the broader market higher, but once an individual stock gets hit hard, once it's out of favor, it stays out of favor."
Among industry groups, financial stocks -- particularly the big banks -- traded poorly during the morning, but surged to the forefront of the afternoon advance as heretofore patient bargain-hunters chased them higher.
Among money-center banks at the close, Wells Fargo was up 2 1/4 at 54 1/4, Manufacturers Hanover up 1 1/4 at 19 1/4 and Bankers Trust up 1 1/4 at 37 3/4. Security Pacific finished up 1 1/8 at 22 3/8 despite soft trading immediately after it announced the redemption of $225 million of its $525 million of auction-rate preferred stock. Chase Manhattan ended the day 3/8 higher, at 10 3/4, following a report that the bank is attempting to bolster its capital by selling its profitable money management unit to a Swiss bank.
Trading was unusually active in Geico shares, which closed up 6 1/2 at 159 1/2. The company declined to comment on the movement.
Eli Lilly added another 2 1/8, closing at 72, after C.J. Lawrence & Co. repeated its buy recommendation.
The Dow transports slipped 8.33 to 835.80, while the utilities rose a moderate 0.88 to 209.88.
Among broad stock indexes, blue-chip measures fared somewhat better than their secondary counterparts. The Standard & Poor's 500 closed up 1.41 at 316.51, the NYSE Composite rose 0.57 at 172.96, the Value Line was up 0.18 at 228.63, the Amex Market Value gained 0.02 at 295.92 and the Nasdaq Composite fell 0.17 at 348.87.