Dow Shrugs Off Bush Health News, Dips 0.89 : Market Overview

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

* Blue chip stocks eased, but most stocks advanced in very heavy trading, after an initial flurry of selling on fears about President Bush’s health.

* The dollar also plunged initially on Bush worries then closed mixed.

Stocks

Wall Street was shaken early by news that Bush had collapsed at a state banquet in Tokyo with what the White House called gastric flu.

At one time, the Dow Jones industrials were off nearly 19 points. But the market rebounded after White House spokesman Marlin Fitzwater’s comment that the president was “feeling fine.”

The Dow closed off 0.89 point to 3,203.94 as New York Stock Exchange volume soared to 290.75 million shares, up from Tuesday’s 252.78 million.

In the broader market, most stocks advanced. NYSE gainers outnumbered losers by about 3 to 2.

Meanwhile, small stocks continued to soar. The NASDAQ composite index shot up 8.03 points to 610.32--its ninth-straight all-time high--led by biotech stocks.

Among the market highlights:

* Biotech madness struck again, as investors heard glowing stories about the industry from a brokerage conference in San Francisco. Among the big gainers, Gensia Pharmaceuticals rocketed 8 1/4 to 67 1/4, Cytogen soared 10 1/4 to 77 1/4, Immunomedics advanced 4 7/8 to 14 1/4 and Alkermes leaped 4 3/4 to 27.

* Health care stocks in general led the market. Winners included Tokos Medical, up 2 3/4 to 43; Salick Health Care, up 1 1/2 to 15, and drug firm Syntex, up 2 1/8 to 52 1/8.

* Investors also chased many industrial stocks, convinced that the economy is poised to recover. ITT Corp. rose 1 7/8 to 57 5/8, steel firm Quanex gained 1 to 23 3/4, auto parts firm Superior Industries advanced 1 1/8 to 35 7/8 and Air Products & Chemicals jumped 2 5/8 to 78 3/4.

* Technology stocks also posted solid gains, continuing their recent rally. Microsoft jumped 4 1/4 to 124 1/4 after brokerage Alex. Brown repeated a strong buy rating. Other winners included: Apple, up 1 3/8 to 60 1/2; Hewlett-Packard, up 2 to 58; FileNet, up 1 to 26; Compression Labs, up 2 1/4 to 32 1/8, and Rainbow Technologies, up 2 to 26 1/2.

* Carnival Cruise Lines rose 1 to 27 3/4 after saying reservations for cruise vacations set a record earlier this week.

* Geothermal-energy firm California Energy plunged 2 1/8 to 13 3/4 after its chief executive resigned.

Overseas, Tokyo stocks plunged, hurt by concerns over Bush’s illness. The 225-share Nikkei average dropped 851.39 points, or 3.6%, to 22,715.00.

In Frankfurt, the 30-share DAX ended 13.72 points lower at 1,578.73. In London, the Financial Times 100-share average ended 15.8 points lower at 2,467.1.

Credit

Corporations rushed out more than $5 billion in long-term bonds in a second day of feverish activity designed to lock in some of the lowest interest rates in decades.

The single-day total was the largest in nearly three years and came one day after companies issued more than $2 billion in new corporate debt.

Meanwhile, market interest rates were mostly flat even in the face of the huge new supply. Among Treasury issues, the price of the bellwether 30-year bond was up 1/16 point, or 63 cents per $1,000. Its yield was 7.39%, unchanged from Tuesday.

The federal funds rate, the interest on overnight loans between banks, was quoted at 4.0%, up from 2.0% late Tuesday.

Currency

Dealers said the dollar initially took a steep dive after the President’s collapse but recovered much of its losses after it became clear that Bush was not gravely ill.

In New York, the dollar ended at 1.512 German marks, compared to 1.521 Tuesday, and at 124.45 Japanese yen, compared to 123.95.

Commodities

Rumors that the federal government will extend export subsidies to several nations sent wheat futures soaring on the Chicago Board of Trade.

Corn and soybean futures also showed substantial gains on prospects of additional exports and concerns that the El Nino weather pattern developing off South America could cause a drought in the Midwest.

Meanwhile, gold advanced on New York’s Comex, with January contracts rising $1 to $351.50 an ounce. But March silver fell 2.8 cents to $3.97.

Market Roundup, D8