Upbeat Traders Push Dow to Record High : Average Gains 17.69 on Signs of Better Economy
The Dow Jones industrial average jumped 17 points to close at a record high as the stock market revived its recent rally with a strong gain Wednesday.
Analysts said hopes for new signs of an improving economy spurred buying in a moderately active session on Wall Street.
The Dow Jones average of 30 industrials surged 17.69 points to 1,368.50, surpassing the closing high of 1,359.54 that it reached July 19.
Volume on the New York Stock Exchange increased to 117.36 million shares from 110.35 million Tuesday.
The market ran into some selling Tuesday as the Dow Jones industrial average flirted with new highs. But analysts said the prevailing mood among investors still seemed to be upbeat.
Government Report
The government reported Wednesday morning that industrial production dropped 0.1% in September. Nevertheless, analysts said traders were increasingly confident that the economy was beginning to gather momentum after a sluggish first half of 1985.
They also said buying interest was stimulated by hopes that third-quarter earnings would not be as disappointing as had been feared earlier.
The government is scheduled to report today on the gross national product for the third quarter. The Commerce Department’s early “flash” estimate put GNP growth for the period at a 2.8% annual rate after adjustment for inflation. There were widespread expectations on Wall Street that the new figure would be higher.
Enthusiasm over the Dow’s new high was muted somewhat by the fact that most other, broader measures of stock-price trends remained well below their previous peaks.
Takeover Speculation
Among the issues contributing significantly to the Dow’s advance were International Business Machines, up 1 3/8 at 129 3/8; General Electric, up 2 1/2 at 61 3/4; Procter & Gamble, up 2 at 58 7/8, and Minnesota Mining & Manufacturing, up 1 5/8 at 78 1/2.
American Telephone & Telegraph, which reported higher third-quarter earnings, gained 3/8 to 21 1/8. Among the regional telephone companies, Ameritech added 7/8 to 90 and Bell Atlantic 1/2 to 88 1/2, also on higher quarterly profits.
Takeover speculation continued in numerous stocks, among them Colgate-Palmolive, up 1 3/8 at 32, and Anheuser-Busch, up 2 at 37. Anheuser-Busch said it wasn’t involved in any discussions about being acquired.
Bond prices edged higher but short-term interest rates were little changed.
In corporate trading, industrials and utilities rose 1/8 point in light trading.
Yields on 30-year Treasury bonds were 10.53%.
