Stock Prices Take Off With Airline Issues

NEW YORK —  Stock prices staged a broad advance Friday, following the lead of soaring airline issues, to cap off a generally upbeat first quarter of 1989 in the market.

The Dow Jones index of 30 industrials rose 12.28 to 2,293.62, finishing the week with a net gain of 50.58 points.

Advancing issues outnumbered declines by more than 2 to 1 in nationwide trading of New York Stock Exchange-listed stocks

Volume on the floor of the Big Board came to 170.96 million shares, up from 159.95 million in the previous session.

Among all the various market indicators, the standout gainer was the Dow Jones index of 20 transportation stocks, up 32.18 points at 1,060.16.

NWA, the parent holding company of Northwest Airlines and one of the average’s components, shot up 16 5/8 to 84 7/8 after financier Marvin Davis proposed a $90-a-share offer for the company.

The news prompted buying of other airline issues. Delta Air Lines gained 3/4 to 58 7/8; AMR rose 1 1/4 to 59 1/2; UAL was up 2 1/2 to 117, and Pan Am advanced 1/2 to 4 7/8.

Analysts said excitement over the airline group spilled over into the general market, overriding recent worries that stocks might be in a vulnerable position in an uncertain economic climate.

The market also drew some encouragement from strength in the dollar and a drop in open-market interest rates.

The Dow Jones industrial index finished the first quarter of the year with a net gain of 125.05 points, or 5.77%. Its advance for March was 35.23 points.

Takeover news wasn’t confined to the airline industry. Citizens & Southern Corp. jumped 9 1/8 to 35 7/8 on word that another bank holding company, NCNB Corp., offered to acquire it through an exchange of stock.

Smithkline Beckman gained 5 1/4 to 60 7/8. Takeover speculation in the stock intensified on word that Britain’s Beecham Group PLC hired the mergers and acquisitions firm of Wasserstein, Perella & Co.

Sears Roebuck rose 1/8 to 43 5/8. On Thursday the company said it was planning to revamp its organizational structure.

Tokyo stock prices edged up Friday to their third straight record close after recovering from an afternoon setback. The Nikkei 225-share index inched up by 12.55 points to a record closing 32,838.68 to end the week with a massive gain of 1,270.16 points, or 4.02%. In London, stock prices closed sharply higher, recouping losses from the previous session. The Financial Times 100-share index rose 25.6 points to close at 2,075.00.

CREDIT

Bond prices rose as softening oil prices lessened fears of inflation and allowed the positive influence of a strong dollar to take effect, bond dealers said.

The Treasury’s benchmark 30-year bond rose 9/16 point, or $5.62 per $1,000 face amount, while its yield, which moves in the opposite direction from its price, fell to 9.09% from 9.15% late Thursday.

James Marshall, a government securities trader with Clayton Brown & Associates in Chicago, said rising oil prices Thursday had put a cap on bond prices. On Friday, oil prices fell about midday as the futures markets reacted to rumors that traffic at the Alaskan port of Valdez was returning to normal following the recent oil spill.

The federal funds rate, the interest on overnight loans between banks, traded at 10%, up from 9.93% late Thursday.

COMMODITIES

Wheat futures prices sank to a six-month low Friday on the Chicago Board of Trade as growing conditions in the Great Plains continued to improve, and a pair of government reports suggested crop prices are more likely to fall than rise this summer.

Corn futures prices rallied Friday on rumors of new Soviet purchases while soybeans were mixed.

On other markets, crude oil prices fell sharply; precious metals advanced, and most livestock and meat futures retreated.

Wheat settled unchanged to 5.25 cents lower, with the contract for delivery in May at $4.0375 a bushel, the lowest settlement of a near-month wheat contract since Sept. 19, when wheat for September delivery ended at $3.9625 a bushel.

Corn settled 2.50 to 5.75 cents higher, with May at $2.685 a bushel; oats were 1.75 to 2 cents lower, with May at $1.8725 a bushel, and soybeans were 1 cent lower to 2.75 cents higher, with May at $7.3825 a bushel.

Wheat’s decline followed a steep selloff on Thursday sparked by heavier-than-expected rain in the parched wheat fields of western Kansas.