Rally Continues as the Dow Gains 2 to Close at Another New High

Stock prices managed to continue their climb in active trading today following a record-setting surge in the previous session.

The Dow Jones average of 30 industrials rose 2.06 points to 1,464.33, a new record and the third this week.

Gainers outpaced losers by three to two on the New York Stock Exchange.

Big Board volume totaled 133.75 million shares, against 150.32 million in the previous session.

The NYSE’s composite index rose 0.12 point to 116.24.

At the American Stock Exchange, the market-value index was up 0.64 point to 241.41.

“The remarkable thing about today is that instead of the market going into the tank and going to sleep, the market is moving foreward. The fact that you’re able to maintain a momentum is the hallmark of bull market,” said Larry Wachtel of Prudential-Bache Securities.

On Thursday, the Dow Jones average jumped 23.05 points to 1,462.27, surpassing the closing high of 1,440.02 set on Monday.

Hopes for continued declines in interest rates have been fueling the rally, analysts say.

Henry Kaufman, chief economist of Salomon Bros., said he expects the Fed to cut its discount rate--what it charges on loans to members--in January.

This morning, the Labor Department reported that rising food and automobile costs sent consumer prices up 0.3% in October, breaking a string of five consecutive 0.2% monthly increases.

However, retail prices have risen at an annual rate of just 3.3% so far in 1985.

Bond prices moved lower in early trading while both short-term and long-term interest rates edged up slightly.

The bond market had been hoping that before recessing for the Thanksgiving Holiday Congress would approve legislation designed to bring federal budget cuts and balance the government’s books by 1991.

Those hopes had been a force driving bond prices higher in recent days, said Maria Ramirez, an analyst with Drexel Burnham Lambert in New York.

But now, with prospects dim for Congress to get the legislation passed, the market’s advance is losing momentum, she said.

Attention is focused today on the Treasury’s auction of $6.75 billion in 30-year bonds. Analysts said the sale will provide another test of foreign demand for U.S. debt.

In the early going, prices in the secondary market for Treasury securities were almost all off. Short-term governments were unchanged to down 1/32 point, intermediate maturities were down from 1/32 point to 5/32 point.