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Stocks End Higher; Dow Up 20.34

August 7, 1998

NEW YORK (AP) _ Stocks extended a modest rebound from Tuesday’s selloff, but a sharper rally faltered today as Japan’s new leader failed to impress investors with his plans to stimulate that nation’s sagging economy.

The Dow Jones industrial average finished up just 20.34 points at 8,598.02 after retreating from a midday gain of 132 points, closing the week about 740 points below the record of 9,337.97 set three weeks ago on July 17.

Technology shares led the Nasdaq market to a second day of big gains, but the Standard & Poor’s 500 finished a shade lower.

In three sessions, the Dow has now recovered about 110 of the 299 points lost on Tuesday.

The afternoon pullback came as the Japanese yen plunged in currency trading amid disappointment that Prime Minister Keizo Obuchi offered nothing new in a speech about his plans to cut taxes and clean up debt-ridden banks.

The market started had the day strong after a new report showing that the economy remained solid last month despite the continuing drag from Asia’s fiscal crisis, while inflationary pressures remain tame.

The Labor Department report also showed that wages _ which often account for two-thirds of a product’s price _ rose at a slower pace in July.

The unemployment rate held steady at 4.5 percent, matching June’s rate and only slightly higher than the 28-year low of 4.3 percent reached in May. Average hourly earnings rose 3 cents for the third consecutive month, to $12.79. That’s smaller than the average monthly increase of 5 cents during the first four months of the year.

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