Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, May 25, 1994                   TAG: 9405260054
SECTION: BUSINESS                    PAGE: C-8   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

IN BUSINESS

NEW YORK - Stocks moved ahead Tuesday, tracking a rebound in the bond market where inflation fears faded.

The comeback in bonds from Monday's setback put stock investors in a buying mood from the outset of trading. Equities have been following the bond market for months and the recovery in bond prices, which caused a corresponding drop in yields, steered stocks higher.

Anthony O'Bryan, a market analyst at A.G. Edwards & Sons Inc. in St. Louis, said the strength in bonds reflected a dip in grain prices after weather forecasters predicted rain in key crop growing regions.

Despite the support of bonds, he said stocks still appear vulnerable to selling after last week's advance that boosted the Dow industrials more than 100 points. The so-so session for blue chip stocks Tuesday illustrated his point, he said.

``Stocks have been due for a rest,'' he said. ``Blue chips in particular were ready to take a time out.''

The bond market's recovery lost momentum by mid-afternoon, which undercut some of the stock buying enthusiasm. Near the close, the benchmark 30-year Treasury bond was up about 3/8 point, which left its yield at 7.39 percent, down from 7.43 percent late Monday. The key bond had tumbled Monday amid renewed concerns about rising prices and interest rates.

Hints of higher prices in the future typically put bond traders on guard because inflation eats into the value of fixed interest-bearing investments.

One of the prominent gainers on the NYSE was Medical Care America, which jumped 37/8 to 271/4 in brisk turnover after a delayed opening. The company has agreed to be acquired by Columbia-HCA Healthcare. Columbia-HCA is parent of Lewis-Gale Hospital in Salem.

- Associated Press