Stocks Continue to Set Records; Dow Climbs 7
The stock market reached new record highs Thursday, posting its fourth straight gain despite some periodic resistance from profit takers.
Analysts generally were impressed that stock prices kept moving ahead in the face of news that seemed to dampen the chances for further easing of credit by the Federal Reserve.
The Dow Jones average of 30 industrials rose 7.06 to 1,855.03, bringing its gain over the past four sessions to 64.85 points.
Volume on the New York Stock Exchange came to 161.40 million shares, against 173.83 million on Wednesday.
Analysts said enthusiasm persisted from Wednesday over the performance of the stock, bond and oil markets, as investors concluded that hostilities between the United States and Libya apparently wouldn’t lead to any major financial or economic disruptions.
Strong GNP Growth
On Thursday, however, the markets encountered something of an obstacle in the government’s report that the gross national product expanded at an annual rate of 3.2%, after adjustment for inflation and seasonal factors, in the first quarter. That growth, which exceeded most advance estimates on Wall Street, raised some doubts that the Federal Reserve will cut its discount rate in the near future.
However, some observers argued that the GNP figure might have overstated the strength of the economy. It is subject to future revision.
BankAmerica climbed 1 1/8 to 17 3/4. On Wednesday, the company posted its first quarterly profit in a year.
John Blair & Co. jumped 3 to 26. MacFadden Holdings, a publishing company, said it expects to make a $25-a-share offer to acquire Blair.
American Telephone & Telegraph led the active list, up at 24 3/4. The stock rose 2 1/8 points Wednesday as the company reported a strong earnings gain for the first quarter.
Digital Equipment, which also came in with a substantially higher profit for the quarter, gained 3 3/4 to 177.
Coca-Cola was up 5 at 115 1/8. The company has announced higher quarterly earnings and plans for a 3-for-1 stock split.
On the downside, Xerox tumbled 4 3/4 to 61 1/8 on word of lower first-quarter earnings.
Hotel Stocks Up
Some investors continued to seek out stocks that might benefit from a shift this summer to domestic travel rather than vacations abroad. Walt Disney Co. rose 5/8 to 47 3/8, Ramada Inns 3/8 to 10 and Hilton Hotels 1 3/8 to 73 5/8.
In the daily tally on the Big Board, advancing issues outnumbered declines by about three to two. The exchange’s composite index gained 0.51 to 140.09.
Large blocks of 10,000 or more shares traded on the NYSE totaled 3,071, compared to 3,169 on Wednesday.
Standard & Poor’s index of 400 industrials rose 0.92 to 269.40, and S&P;'s 500-stock composite index was up 0.81 at 243.03.
The bond market’s rally ran out of steam after the Commerce Department issued the unexpectedly robust GNP figure.
But the sell-off was subdued because traders generally maintained their optimism about further reductions in interest rates.
The Treasury’s 30-year bond--after bounding ahead by more than 3 points Wednesday--lost nearly 1 point, or $10 for each $1,000 in face amount. Its yield crept back up to 7.13% from 7.11% late Wednesday, which was the lowest level since the early 1970s.