Bulls’ Rampage Roars On as Dow Industrials Jump 35.72 in Record Trading

The furious bull market of 1987 continued its record-shattering stampede Thursday as the Dow Jones index of industrial stocks rose 35.72 to set another all-time high as more shares were traded than on any day in history.

Paced by strong showings in technology, auto and import-sensitive issues, the widely c,17p6

followed Dow index closed at 2,070.73, its ninth consecutive record finish and its 10th straight gain since Jan. 2. In that period, the Dow has gained 174.78, or 9.2%, compared to a 22.6% gain for all of 1986.

Gainers overall led losers two to one on the New York Stock Exchange. Volume on the Big Board swelled to a record 253.12 million shares, breaking the previous record of 244.68 million set Dec. 19.

Thursday’s rally, analysts said, was fueled by many of the same factors that have powered the market during the past week and a half: optimistic investor psychology, expectations of lower interest rates, and signs of an upturn in the economy and corporate profits.

The market has been due for a strong rally after staying generally flat for the last seven months of 1986, analysts said.

“The market was like a coiled spring. After resting for so long, it had a lot of room to run,” said A. Marshall Acuff Jr., portfolio strategist at Smith Barney, Harris Upham. Breaking the 2,000 level on the Dow--rather than triggering profit taking as might have been expected--has actually attracted more investors to the market, he contended.

Factors Behind Surge

Buying has also been sparked by investors reinvesting cash they received from year-end selling to take advantage of lower capital gains taxes. That cash is going back into stocks, because Treasury bills, money-market funds and other investments are still relatively unattractive thanks to low interest rates.

The market was also buoyed Thursday by expectations that central banks of West Germany and Japan might soon lower their discount rates, the rates they charge commercial banks. Such cuts could lead to cuts in U.S. interest rates.

Continuing weakness in the dollar also has boosted stocks in such import-sensitive industries as paper, chemicals, machinery and electrical equipment, analyst Acuff said. Continued declines in the dollar are expected to further boost prices of imported goods and aid sales and profits of American firms.

Investors also were encouraged by early reports of strong corporate profits, particularly in the long-battered technology sector. Most notable was the announcement that Digital Equipment’s earnings rose 98% in its latest fiscal quarter. Digital stock, which jumped 11 1/2 on Wednesday, gained an additional 2 7/8 to 132 7/8 in active trading Thursday.

Technology stocks overall have outpaced blue-chip stocks since the beginning of the year, reversing the trend of the past several months, analysts said. Such strength in technology stocks is a sign that more individual investors are entering the market, as usually conservative institutional investors, such as pension funds, tend to avoid these more-volatile issues.

Analysts Disagree on Signal

Analysts, however, differed over whether increased speculative activity in technology stocks and other previously lackluster issues could be a signal that a correction is near.

“Buying has reached a kind of hysteria” that is indicative of a market top, said Michael Metz, market strategist at Oppenheimer & Co., who predicted that the Dow will fall back to 1,700 later this year.

Blue-chip issues posting strong gains Thursday included General Electric, which rose 1 3/4 to 92 3/4 after reporting higher quarterly profits. International Business Machines gained 1 3/8 to 120, and Minnesota Mining & Manufacturing rose 4 3/8 to 124 1/2.

Airline issues also posted strong gains, in part because of reports of merger talks between Pan Am and AMR, parent of American Airlines. Pan Am gained 1 1/8 to 5 1/2, while AMR added 1 to 55 3/4. Among other airline issues, UAL jumped 2 to 55 3/4; Delta Air Lines rose 1 to 51, and Trans World Airlines added 5/8 to close at 24.

Auto issues also were strong, with General Motors up 1 at 68 1/2; Ford Motor up 1 1/2 at 70 1/2, and Chrysler 3/4 higher at 44 7/8.

Overall on the NYSE, 1,074 stocks were up, 567 issues fell and 372 were unchanged. The exchange’s composite index gained 1.51 to 152.09.

Nationwide turnover in NYSE-listed issues, including stocks on regional exchanges and in the over-the-counter market, totaled 292.11 million shares.

Standard & Poor’s index of 400 industrials rose 3.67 to 297.40, and S&P;’s 500-stock composite index was up 2.85 at 265.49.

The NASDAQ composite index of OTC stocks gained 2.62 to 392.57, while the American Stock Exchange market-value index closed at 292.55, up 2.87.

Meanwhile, bond prices rose slightly in dull trading with little news to stimulate the market. The Treasury’s key 30-year bond was up point, or $2.50 for each $1,000 in face amount, and its yield fell to 7.38% from 7.41% late Wednesday.

In the secondary market for Treasury securities, prices of short-term governments were unchanged, intermediate maturities ranged 1/16 point to 3/16 point higher and long-term bonds were 1-16 point higher, according to Salomon Bros.