MARKET SAVVY : Commodity Prices Jump, and Yields Follow; Stocks Ease

A fresh surge in key commodity prices sent bond yields higher and stocks mostly lower Tuesday.

Crude oil futures jumped to a 23-month high after the Organization of Petroleum Exporting Countries’ top official implied that the cartel won’t raise oil output until March.

Grain and metal prices also continued to rebound from recent lows.

Stocks’ reaction was fairly subdued, despite the inflationary implications of rising commodity prices: The Dow Jones industrial average eased just 44.32 points, or 0.4%, to 11,034.13.

The Nasdaq composite edged down 0.2%, supported by gains in major tech stocks.

In the bond market the yield on the bellwether 30-year Treasury bond rose to 6.07% from 6.02% on Friday, when yields dove on news of the weaker-than-expected August employment report.

Traders said bond investors are jittery as commodity indexes rise. The Bridge-Commodity Research Bureau index of 17 major commodities jumped 1.5% to its highest level since November.

Oil is the biggest worry: October crude futures rose 61 cents to $22.61 a barrel Tuesday, highest since October 1997, after OPEC Secretary General Rilwanu Lukman said oil output cuts made by the OPEC members will be “valid” until they expire next March.

OPEC members will meet Sept. 22 to discuss the cuts, which came after a worldwide glut caused prices to tumble 32% last year.

OPEC last month made 95% of promised reductions, according to a Bloomberg News survey. The group produces about a third of the world’s oil.

In other commodity markets, metal prices are rising amid growing global demand, while grain prices are up because of dry Midwest weather as harvest time approaches. Near-term soybean futures soared 4.5% Tuesday.

The International Monetary Fund sees the global economy growing faster in 1999 and 2000 than expected earlier this year, an IMF report said Tuesday. That could continue to lift demand for commodities.

Gold also edged up Tuesday after IMF documents obtained by Reuters said the IMF plans to scrap a plan to sell 10 million ounces of its reserves to fund aid to poorer nations.

On Wall Street the stock market suffered from a general lack of interest Tuesday, after soaring Friday on the heels of the employment report. The Dow had rocketed 235 points Friday.

Losers topped winners by 16 to 13 on the New York Stock Exchange on Tuesday.

Among Tuesday’s highlights:

* Media and entertainment shares were hot in the wake of the CBS-Viacom merger deal. Companies that own radio and TV stations were big gainers, on expectations for more mergers ahead.

Winners included Chris-Craft Industries, up $5.56 to $57, and Clear Channel, up $4.56 to $76.19.

* Bank and financial stocks pulled back as bond yields rose again. Wells Fargo eased $1.31 to $40.13 and Chase Manhattan lost $3.63 to $81.38.

Utility stocks also sank. The Dow utility index slumped 1.6%.

* Some major tech stocks were in demand, with Motorola rocketing $4.88 to $100 after brokerage Lehman Bros. upgraded the stock to “buy.”

Other hot stocks included Apple Computer, up $2.88 to a record $76.38; and Oracle, up $2.31 to $43.81.

But Intel lost $1.69 to $87.63 and Microsoft fell $1.63 to $94.25.

* Energy stocks were mostly higher with crude oil prices. Anadarko Petroleum soared $1.63 to $35.63, Apache zoomed $3.38 to $48.56 and Halliburton gained $2.31 to $48.31.

But airline stocks were losers on rising worries over fuel prices. Alaska Airlines fell $1.44 to $43.69 and Delta tumbled $2.56 to $50.13.

* Coca-Cola continued to dive after warning last week of disappointing third-quarter earnings. It fell $2.75 to $54.63.

Market Roundup, C11