Bond Surge on Volcker Testimony Triggers Industrials' 10.38 Advance
A blue-chip rally sparked by an upturn in bond prices enabled the stock market to close higher yesterday for the first time in six sessions. Trading was active.</br></br>The bond market headed up after Paul Volcker, Federal Reserve Board chairman, indicated in testimony before the Senate Banking Committee that the Fed left credit policy essentially unchanged at its July meeting. He also said that the Fed's Open Market Committee expects economic growth to moderate soon.</br></br>After sliding 36.33 points to a 17-month low in the prior five sessions, the Dow Jones Industrial Average lost another 3.75 points in yesterday's first 90 minutes; rebounding during the afternoon, the index showed a 13.47-point gain at 3 p.m. EDT, and finished at 1096.95, up 10.38 points. The utility indicator also rose, but the transportation average lost ground.</br></br>The broader market wasn't so strong as the industrial average. New York Stock Exchange gainers led losers by 789-to-739.</br></br>"The market was reacting to a better bond market, and particularly to Mr. Volcker's statement that the economic expansion is expected to moderate," asserted Robert Kahan, partner in charge of trading at Montgomery Securities, San Francisco. He also noted that "a major buy program came into the market."