Bond Prices, Stocks Post Sharp Gains --- Technical Factors Cited by Analysts; Dollar Slides Back
Stock and bond markets rebounded sharply in what many analysts said were technical rallies following sustained declines.</br></br>The Dow Jones Industrial Average soared 47.30 points to 2590.54 in active trading. And the Treasury's benchmark 30-year bond climbed one point, or $10 for each $1,000 face amount.</br></br>The dollar, meanwhile, slid back from levels reached in Tuesday's big rally. That rally was triggered by subsequently denied rumors that Mikhail Gorbachev was considering resigning as head of the Soviet Communist Party.</br></br>Analysts were skeptical about the nature of the stock and bond market rallies, noting that investors and traders in each market sought out reasons to be optimistic and ignored evidence to the contrary.</br></br>The stock market rally, for instance, began at the opening bell after an early-morning report that the index of leading economic indicators for December rose much more than expected. Investors concluded the economy isn't as weak -- and corporate earnings not as likely to decline -- as they had suspected. But investors chose to ignore a later report that showed new home sales at their lowest levels in five years, evidence that a large sector of the economy remains very weak.