Dow up as rate fears fade

PUBLISHED : Thursday, 23 December, 1993, 12:00am
UPDATED : Thursday, 23 December, 1993, 12:00am

STOCKS on Wall Street opened higher yesterday as concern fades that inflation is rising and the Federal Reserve Board is close to raising interest rates.

The Dow Jones Industrial Average was up 8.1 points to 3,753.25 in early morning trade.

Declines in oil prices and interest rates and gains in overseas stock markets are reinforcing higher US stock prices.

''I see some experts predicting US$10 a barrel in six to 18 months,'' said Richard Ciardullo, head trader at Eagle Asset Management, which manages about $6 billion in Florida. ''If that happens, I think that's going to offset concerns about inflation and Fed tightening.'' The US dollar turned lower in light trading against most major foreign currencies following a favourable report on the nation's economic performance during the third quarter.

The Commerce Department said the US gross domestic product expanded at a revised seasonally adjusted annual rate of 2.9 per cent in the third quarter, after inflation is taken into account.

The government's third and final estimate of economic output in the July-September period compared with a previous estimate of a 2.7 per cent growth rate.