MARKET RALLIES FOLLOWING FED FUND RATE CUT
NEW YORK — The stock market rebounded Tuesday from Monday’s 101-point loss on the Dow Jones Industrials with an assist from the Federal Reserve Board’s Open Market Committee.
The Fed cut the federal funds rate by 0.25 of a percentage point and the market quickly reversed an early morning decline with the Dow finishing ahead by 34.68 points to 5,109.89. Several banks also reduced their prime rates to 8.50 percent from 8.75 percent after the Fed acted.
Despite the ebullient market, Kmart stock continued to drift downward. It lost 1/8 to 5 7/8, another new low, on a heavy turnover of 8.2 million shares. Kmart held a board meeting on Tuesday but there was no indication of what was decided. Analysts are speculating that the company will completely eliminate its quarterly dividend after cutting it to 12 cents from 24 cents last April.
Most other retail and apparel stocks were mixed. Among the winners were Sears, Roebuck, which rose 7/8 to 39 3/4; Wal-Mart, which gained 3/8 to 23 1/4, and Intimate Brands, up 1 to 14 7/8. Among the apparel makers, Jones Apparel Group jumped 1 7/8 to 36 7/8. — Fairchild News Service