Late Blue Chip Buying Boosts Dow 25.94 : Market Overview

Blue chip stocks ended sharply higher on bargain hunting.

* The dollar continued to fall.

* Orange juice futures prices crumpled amid talk that the Florida crop could exceed last year’s by as much as 40%.

Stocks

Late afternoon buying sent the Dow Jones average up 25.94 points to 3,276.26. It had fallen 76.73 points last week.

Advancing issues outnumbered declines 7 to 6 on the New York Stock Exchange. Big Board volume came to an estimated 157.48 million shares, down from 213.65 million Friday.

Stocks appeared to benefit from renewed declines in bond interest rates.

Activity was curtailed by the observance of Rosh Hashana, the Jewish new year.

Market highlights:

*Medical Care America, the most active NYSE issue, dropped 2 7/8 to 22 1/8 in the wake of Friday’s 33-point plunge. The company said Friday that it expects flat third-quarter earnings, in contrast to the 20% increase analysts had forecast.

Other health care stocks were mixed in active trading after falling sharply Friday. Brokers blamed the selloff on talk that national efforts at health care reform might lead to pressures on profitability at many health businesses.

* In the pharmaceutical group, Merck dropped 1/2 to 43 1/4, Schering-Plough fell 1 3/4 to 55 1/2, Pfizer lost 1/2 to 74, and Bristol-Myers Squibb slipped 3/8 to 62 5/8. But Glaxo Holdings rose 1/4 to 25 7/8.

* Among medical, biotechnology and other health care stocks traded on NASDAQ, U.S. Healthcare fell 3 1/4 to 61, Amgen 1 3/8 to 62 1/2 and Biomet 1/2 to 15 5/8. But Surgical Care Affiliates rose 1/4 to 22 3/4, and Healthcare Compare was steady at 28 1/2.

* Apple Computer, another NASDAQ issue, dropped 3/4 to 44 3/4. The company cut suggested retail prices for many of its Macintosh personal computers and related products.

* Goodyear Tire & Rubber, among the Big Board volume leaders, fell 5/8 to 58 3/8 even though the company issued a bullish sales and earnings estimate for the third quarter.

* Energy stocks posted gains. Exxon was up 1 1/8 to 64 5/8, Texaco 1 to 64 1/2 and Chevron 1 5/8 to 75 3/8. Benefiting from a surge in gas prices, Consolidated Natural Gas rose 1 3/8 to 47 3/4, Panhandle Eastern 1/4 to 18 3/4 and Enron 1 3/8 to 48 1/4.

Stocks took a drubbing overseas. In Tokyo, the 225-share Nikkei average fell 422.15 points, or 2.29%, to 17,972.61. Many investors, worried about the rising value of the yen, stayed away from the market. Volume was a light 200 million shares.

In London, prices were sharply lower as investors took profits after a recent rally. The 100-share Financial Times index lost 41 points to 2,560.0.

In Frankfurt, a bearish economic outlook, the weakening dollar and forecasts of losses at Volkswagen pushed stock prices down 2.5%. The 30-share DAX average fell 38.32 points to 1,475.04.

Credit

Bond prices rose on speculation that economic reports due out this week could force the government to lower interest rates.

The price of the Treasury’s main 30-year bond gained 7/32 point, or $2.19 per $1,000 in face amount. Its yield, which falls when prices rise, fell to 7.34% from 7.36% Friday.

Traders are basing their hopes for lower interest rates on the unemployment report for September that will be released Friday. Further weakness in employment could prompt the Federal Reserve to lower interest rates to stimulate the economy.

The federal funds rate rose to 3 3/8% from 3 1/4% Friday.

Currency

The dollar continued to drop as currency traders grew increasingly concerned about the U.S. economy and the presidential race.

The Japanese yen, in particular, gained again at the expense of the dollar. The greenback slipped to 119.65 yen in New York from 120.75 Friday.

It fell to 1.4525 German marks from 1.4795. The British pound traded at $1.7295, more expensive than Friday’s $1.7150.

Meanwhile, some European central banks continued to maneuver. Reflecting the increased stability, Sweden’s central bank cut its key short-term lending rate from 50% to 40%. Ireland’s central bank raised short-term interest rates to try to make the punt more attractive--but it failed to gain strength.

Other late dollar rates in New York, compared to Friday’s, included: 1.26975 Swiss francs, down from 1.2945; 4.9000 French francs, down from 5.0070; 1,222.5 Italian lire, down from 1,238.5, and 1.24795 Canadian dollars, up from 1.24015.

Commodities

The price of frozen concentrated orange juice for November delivery plunged 5.3 cents to $1.086 a pound on the New York Cotton Exchange.

The selloff occurred on the first trading day after a three-day conference in New York at which industry watchers said the Florida crop could exceed 200 million 90-pound boxes, compared to last year’s 145 million.

Celeste Georgakis of Cargill Investor Services Inc. in New York said one reason that estimates are rising is that there are more trees in production this year as the Citrus Belt continues to recover from a 1989 freeze that damaged trees. The Agriculture Department will release its first estimate of Florida production Oct. 8.

On other markets, cotton futures fell sharply; precious metals moved lower; oil prices rose; natural gas fell; grains and soybeans were mixed, and livestock and meat futures were mixed.

Gold fell $1.70 to $347.60 an ounce on the New York Commodity Exchange. September silver fell 6.9 cents to $3.73 an ounce.

Market Roundup, D8