Dow Rises 9.50 to Close Fraction Shy of Record

Hopes for lower interest rates helped keep stock prices forging ahead Wednesday, propelling several broad market indexes to record highs.

But the best-known measure of market trends, the Dow Jones industrial average, just missed hitting a new closing peak.

Dow Jones’ average of 30 bluechip stocks rose 9.50 to 1,885.05, its highest level since it established a record of 1,885.90 on June 6.

Volume on the New York Stock Exchange came to 161.79 million shares, up from 140.62 million on Tuesday and the heaviest total since a 173.83-million-share day on April 16.

Analysts said the market continued to benefit from expectations of lower interest rates.

Recent signs of sluggish economic growth have prompted widespread forecasts on Wall Street that the Federal Reserve will take new steps to relax its credit policy.

Flirted With 1,900 Level

Specifically, many economists are looking for a reduction soon in the Fed’s discount rate, the rate that it charges on loans to private financial institutions.

At mid-session, the Dow flirted with the 1,900 level and then pulled back. But Wall Streeters said it remained to be seen whether that round number was shaping up as a potential point of resistance for the market’s long advance, which began nearly four years ago at 776.92.

Fruehauf was actively traded, up 2 1/8 at 48 1/2. The company said it agreed to a buyout at $48.50 a share.

Retailing issues were strong. Sears, Roebuck gained 1 to 48, K mart rose 1 1/8 to 55 5/8, J. C. Penney climbed 7/8 to 81 3/4, Federated Department Stores rose 7/8 to 87 5/8 and Allied Stores gained 2 to 51 1/8.

The industry is widely seen as a major beneficiary of tax overhaul, and lately many retail stocks also have been bolstered by takeover speculation.

Safeway Stores jumped 3 7/8 to 51 1/2 on reports, unconfirmed as of the market’s close, that Dart Group was preparing to launch a bid for control of the company.

ITT, rumored to be near an agreement to sell its European telecommunications operations, gained 4 to 49 3/8.

Large blocks of 10,000 or more shares traded on the NYSE totaled 3,036, compared to 2,598 on Tuesday.

Indexes Hit Record Highs

Advancing issues outnumbered declines by five to three in the overall tally on the Big Board. The exchange’s composite index, with a gain of 1.02 to 142.74, topped the high that it set May 29.

The NASDAQ composite index for the over-the-counter market, up 3.30 at 402.22, and the American Stock Exchange market-value index, up 0.79 at 285.19, both set records.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 191.30 million shares.

Standard & Poor’s index of 400 industrials rose 1.84 to 277.89, and S&P;’s 500-stock composite index was up 1.90 at 248.93.

In the bond market, prices finished sightly lower following a strong advance in the previous session. Short-term interest rates inched higher.

In the secondary market for Treasury bonds, prices of short-term governments were off 3/32 point from Tuesday’s close, intermediate maturities were down 5/32 point and long-term issues were off 2/32 point, according to the investment firm Salomon Bros.

In corporate trading, industrials were off 1/8 point and utilities were down point.

Yields on 30-year Treasury bonds rose to 7.36% from 7.35% late Tuesday.