Earnings News Helps Boost Dow by 35.77

Market Overview

Highlights of Monday’s market activity, compiled from Times staff and wire reports:

* Stock prices rose sharply, buoyed by strength in technology, airlines, oil and chemical issues.

* The Dow Jones industrial average closed up 35.77 points at 3,019.45.

* Oil prices surged in the commodities market amid persistent concerns about tight supplies this winter.

Stocks

Advancing issues outnumbered declines by more than 2 to 1 on the New York Stock Exchange.

Big Board volume totaled 130.13 million shares, down from Friday’s 148.85 million.

An upturn in the bond market overseas also helped stocks. The U.S. bond market was closed for the Columbus Day holiday.

Investors also regained confidence due to slightly better than expected third-quarter earnings reports. The Columbus Day observance made for a thin market.

Computer-driven program buying also contributed to the market’s advance.

“There were some programs (buying) and with the holiday volume, swings were likely to be exaggerated,” said Jeff Kaminsky of Mabon Securities Corp.

He said some cyclical stocks led the rise, with technology, paper, chemical and airline issues among the standout gainers.

Robert Stovall at Stovall/21st Advisers said the market had merely retraced its losses since the beginning of the month. “When we entered October, the Dow was at 3,016.77,” he said. “Here we are at mid-month, and the market’s crawled back up.”

Ralph Acampora, director of technical research at Prudential Securities Inc., said: “The market from a technical point of view was a little oversold. There’s a lot of money coming up with the rollovers (of certificates of deposits).”

But he added: “One day doesn’t a trend make.”

Peter Davies at Nomura Securities said hopes for lower interest rates helped boost stocks after a favorable reading on wholesale inflation last month. On Friday, the government reported a small 0.1% rise in wholesale prices after a 0.2% August rise, suggesting inflation remains under control.

“But I don’t see a particular reason to be optimistic,” Davies added. “Earnings numbers have to be very good to support the market at these levels.”

Among the market highlights:

* Great Lakes Chemical jumped 10 5/8 to 96 7/8 after the company said it would increase its holding in Octel Associates and the Associated Octel Co. to 87.8% from 51.1%. Merrill raised its estimates on the company.

* Argentina Fund gained 2 7/8 to 16 on strong investor interest after a robust rise in the Argentine stock market.

* Stewart & Stevenson jumped 3 1/4 to 50 3/4. Shearson Lehman, Rauscher Pierce and Wertheim Schroder all repeated buy ratings on the company after it won a five-year Army contract worth $1.2 billion.

* Primerica added 3/8 to 34 7/8 after it reported better-than-expected third-quarter results.

* In the airline group, AMR Corp. rose 2 1/2 to 60 3/4, UAL added 3 1/8 to 127 3/8, and Delta rose 1 7/8 to 67 3/4.

* Technology stocks led the over-the-counter market higher. Microsoft gained 2 5/8 to 92 1/4; Xilinx 2 1/8 to 24 7/8; Intel 7/8 to 42 3/4; Lotus Development 2 1/4 to 30 1/2, and Apple Computer 1 3/8 to 49 7/8.

Their gains helped the NASDAQ composite index of OTC issues rise 6.61 points to 525.66.

Overseas, Tokyo stocks slid, with the Nikkei 225-share average ending the day down 297.05 points, or 1.23%, to 23,860.67.

Share prices rose on the London Stock Exchange. The Financial Times 100-share average was up 19.5 points to close at 2,574.5.

In Frankfurt, the 30-share DAX average edged up 2.62 points to close at 1,571.04.

Credit

U.S. Treasury bond prices rose slightly in extremely thin trading in London. U.S. markets were closed for the Columbus Day holiday.

The price of the Treasury’s bellwether 30-year bond edged up 1/16 point, or 63 cents per $1,000 in face amount, from its close in New York on Friday. Its yield settled at 7.88%, unchanged from late Friday in New York.

The long bond fell as much as 5/32 point before moving higher, but analysts saw few factors to influence the lightly traded session.

On the Chicago Board of Trade, where Treasury futures are traded, prices fell moderately in thin trading before regaining most of the loss.

The federal funds rate was not reported because of the holiday. On Friday, the funds rate--the rate banks pay each other for overnight loans--was quoted at 5.0%.

Currency

The dollar gained against most major currencies in a lightly traded session dominated by speculators.

Most banks and currency dealers had skeleton crews on hand during the quiet Columbus Day holiday.

Traders said there was no significant economic news during the day. Some players were speculating over what interest rate policy might emerge from a meeting of finance ministers of the Group of Seven industrialized nations in Thailand, said Debra Middleton, assistant vice president at Harris Trust & Co. in Chicago.

“The only thing I can still sink my teeth in is that rates in the U.S. are still going to be coming lower,” Middleton said.

Lower rates likely would cause the dollar to fall. All currencies are supported by higher rates, and undermined by lower yields.

Middleton said most of the trades were speculative, although some customers were buying dollars to protect their positions, she said.

Most of the action surrounded trading of Japanese yen against the German mark.

In New York, the dollar rose to 1.702 German marks in New York, up from 1.690 Friday. But it fell to 129.95 yen in New York, off from 129.58 Friday. The British pound fell to $1.712, less expensive than $1.724 late Friday.

Commodities

Crude oil climbed to its highest price in nearly nine months.

Light sweet crude oil for November delivery rose 37 cents on the New York Mercantile Exchange to settle at $23.46 a barrel, the highest settlement of a near-term crude contract since Jan. 22.

On other commodity markets, orange juice for near-term delivery fell; precious metals were lower; grains and soybeans were mixed, and livestock and meat futures were mixed.

The crude market rose rapidly after the November contract surpassed last week’s high of $23.33, which brought in fresh speculative buying, said Ann-Louise Hittle, senior oil analyst with Shearson Lehman Bros. Inc. in New York.

She said fundamental support stemmed partly from jitters about possibly tight supplies of Soviet crude and heating oil available for export to Europe.

Further buying was linked to a renewed sense that Iraq is not willing to meet U.N. conditions for resumed exports of its oil, which were banned shortly after the invasion of Kuwait in August, 1990.

Precious metals fell on New York’s Commodity Exchange in quiet trading.

Gold for October delivery slipped $1 to $358.90 an ounce, while December silver fell 5 cents to $4.097 an ounce.

Market Roundup, D12