Dow Roars Past 2,100 Mark; Tech Stocks Pace Rebound
The stock market roared back from an early bout of profit taking Monday, propelling the Dow Jones industrial average past 2,100 and stretching the indicator’s winning streak to 12 straight sessions.
The closely watched average of 30 blue-chip stocks climbed 25.87 to a record 2,102.50. It was the 11th consecutive session in which the Dow industrial average has posted a record.
Advances outpaced declines by about two to one, with 1,045 issues gaining and 568 falling, while 370 were unchanged on the New York Stock Exchange. Big Board volume totaled 162.83 million shares, compared to 218.39 million Friday.
Monday’s increase in the blue-chip indicator matches the longest string of consecutive gains since it was expanded to 30 stocks in 1928. The previous series of 12 increases in a row occurred about 16 years ago, from Nov. 19 through Dec. 7, 1970.
Volume was reduced by the Martin Luther King Jr. holiday, observed by a minute of silence at noon on the floor of the New York exchange. A strike against the Long Island Railroad also left many stock brokers stranded in the New York suburbs. But the bullish enthusiasm that has engulfed Wall Street since the beginning of the year wasn’t quelled.
“The momentum is still there,” said Raymond DeVoe, an analyst for Legg Mason Wood Walker. “There still seems to be a lot of money sloshing around ready to come in.”
After an initial bout of selling in the morning, buyers jumped back into the market when they believed it had reached its low for the day, analysts said. Some profit taking had been widely anticipated after the market’s spectacular gains since the new year started.
Technology Shares Surge
A strong surge in technology shares led the market from its early rut. Even International Business Machines, which fell recently to a 52-week low on expectations of lower earnings this week, participated in the upturn.
IBM climbed 5 to 125, highlighting strong trading throughout the high-tech segment, which then spread to the market as a whole. The computer giant was the Big Board’s volume leader, with around 2.7 million shares traded. Digital Equipment jumped 6 to 143. Hewlett Packard rose 4 to 54 and Honeywell gained 1 1/2 at 63 1/2.
Analyst Mike Geran of E. F. Hutton said of IBM: “Tomorrow’s (fourth-quarter) earnings may not be the absolute disaster that everyone is expecting.”
USX Corp. firmed 3/8 to 24. Over the weekend, the company reached tentative agreement with the United Steelworkers union on a new labor contract that is expected to end a work stoppage against the country’s biggest steelmaker.
‘Dramatic Moves’
Pan Am fell to 5 3/4 in heavy trading. The airline reportedly was engaged in preliminary talks with American Airlines about a possible takeover, according to published reports.
“We’re getting some very dramatic moves on individual stocks,” said Bill Raftery, an analyst for Smith Barney. “It looks like we’ve got a solid demand market.”
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 190.74 million shares.
The NYSE index rose 1.50 to 153.71. A total of 3,238 blocks of 10,000 or more shares traded on the NYSE, compared to 4,145 on Friday.
Standard & Poor’s index of 400 industrials rose 3.92 to 302.19, and S&P;’s 500-stock composite index was up 3.06 at 269.34.
At the American Stock Exchange, the market value index rose 3.21 to 293.97. Home Shopping led the Amex actives, up 12 3/8 to 65 3/8. The shop-at-home retailer’s chairman, Roy Speer, said the company was “in discussions” about the possibility of making two acquisitions.
Texas Air was second, up 2 5/8 to 42. Lorimar-Telepictures was third, up 1 1/8 to 17 3/4. The NASDAQ composite index closed at 392.59, up 2.72.
Wilshire Rises
The Wilshire index of 5,000 equities closed at 2,704.719, up 0.95% from Friday.
There was no trading in government bonds Monday as domestic markets closed for the King holiday, but prices fell in London trading.
The U.S. Treasury’s 30-year issue closed down in London by 9/32 of a point, or more than $2.50 per $1,000 face amount. Its yield stood at 7.35%, down from 7.38% in New York on Friday, according to figures provided by Telerate Inc.
Other U.S. government securities closed slightly lower in London.
There was corporate bond trading in New York, where industrials and utilities were unchanged, according to Salomon Bros. Trading was extremely light.
Among tax-exempt municipal bonds, revenue bonds were down point and general obligations bonds were unchanged in extremely light trading, Salomon Bros. said.
The federal funds rate, the interest on overnight loans between banks, closed at 5-15/16% in London, unchanged from the same level in New York on Friday.
