Modest Market Gains Give Dow a New High
Stocks used a modest advance Friday to close the first half of 1985 at record levels.
Prices moved within a narrow range for most of the day, but the upturn shortly before the closing bell was enough for several of the market’s key averages to best their previous highs reached Thursday.
The Dow Jones average of 30 industrials rose 3.25 to an all-time high of 1,335.46, and, for the week, the measure advanced 10.98 points. Through the first six months of the year, the blue-chip average was up 123.89 points, or 9.3%.
The Dow Jones transportation average also set a new high, gaining 1.05 to 664.09, as did the New York Stock Exchange composite index, which rose 0.39 to 111.11.
Overall advances led declines by three to two on the NYSE, and Big Board volume totaled 105.24 million shares, against 106.73 million Thursday.
Rally in Bond Market
Auto, retail, telephone and financial issues led the gainers.
Stocks again were underpinned by a rally in the bond market, where prices of Treasury bonds rose about a point, or $10 for every $1,000 in face value, for the second consecutive day. Conversely, some short-term interest rates fell by about a tenth of a percentage point.
Wall Street also appeared to take in stride the Commerce Department’s report that its key gauge of future economic trends--the index of leading economic indicators-- rose 0.7% in May after declining 0.6% and 0.1% in April and March, respectively.
Investors are hopeful that an upturn in the economy will contribute to higher corporate earnings later this year and in 1986, although some economists say the outlook for manufacturing remains poor.
Regardless, analysts said that, because Friday was the final day of the second quarter, many institutional money managers were busy shuffling stocks to bolster the second-quarter performances of their portfolios--which helped keep the market within a narrow trading range.
American Medical International rose to 26 and topped the NYSE’s active list after a 4.6-million-share block traded at 25 7/8.
Elsewhere on the list, American Telephone & Telegraph gained 5/8 to 24 1/8, Pan American World Airways was up at 7 1/8 and Schlumberger rose 3/4 to 38 5/8. International Business Machines lost to 123 3/4, however.
In the financial sector, Citicorp climbed 1 3/4 to 49 3/8, H. F. Ahmanson rose 1 1/8 to 36 and J. P. Morgan advanced 7/8 to 51 1/2.
Clevepak jumped 1 1/2 to 12 7/8 after suspending its dividend and saying it received offers for the purchase of the company by unidentified suitors.
Kaiser Aluminum & Chemical was unchanged at 13; an 800,000-share block crossed at 13.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 125.25 million shares.
Large blocks of 10,000 or more shares traded on the NYSE totaled 2,032, compared to 2,175 on Thursday.
The Wilshire index of 5,000 equities closed at 1,977.844, up 7.805.
Standard & Poor’s index of 400 industrials rose 0.62 to 211.92, and S&P;'s 500-stock composite index was up 0.62 to 191.85. Both were record highs.
At the American Stock Exchange, the market-value index rose 1.20 to 230.89.
The NASDAQ composite index for the over-the-counter market closed at 296.20, up 0.86.
In the secondary market for Treasury bonds, prices of short-term governments gained 3/8 point, intermediate maturities were up by between 3/4 point and 1 points and long-term issues climbed by about 1 1/8 points.
The movement of a full point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.
In corporate trading, industrials rose 3/4 point and utilities rose 7/8 point in light trading, Salomon Bros. said. It said that, among tax-exempt municipal bonds, general obligations were unchanged and revenue bonds fell 1/8 point in light activity.
The Merrill Lynch Daily Treasury Index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, rose 0.60 to 106.82.
Yields on three-month Treasury bills fell 6 basis points to 6.82%. Six-month bills dropped 10 basis points to 6.98%, and one-year bills were off 15 basis points at 7.17%. A basis point is one-hundredth of a percentage point.
Yields on 30-year Treasury bonds fell to 10.44% from 10.54% late Thursday.
The federal funds rate, the interest on overnight loans between banks, was 7.25%, down from 8% late Thursday.