Dow Up Record 51.60 Points as Rally Continues

The stock market’s January rally roared with new life Thursday after a one-day breather, lifting the Dow Jones industrial average a record 51.60 points to 2,145.67.

Trading was heavy, at 188.66 million shares, even though many businesses closed early because of a fierce East Coast snowstorm, and the advance was the market’s 14th in the last 15 trading days. The Dow has gained 249.72 points during that period, adding 13.2% to its value.

The daily point gain increased the Dow index’s value 2.5% and surpassed the previous record daily gain of 41.02 points, set Jan. 5.

The eager buyers included many who have felt themselves losing out in the market’s recent mad rush, market watchers speculated. “There’s some people who have been desperate to get into this market,” said Alfred Goldman, market strategist with A.G. Edwards & Sons in St. Louis. “They’ve been standing on the shore, looking forlornly as the boat pulled away.”

Analysts said the market was again powered by factors that have drawn in billions of investors’ dollars since the beginning of 1987.

The change in the federal tax rules generated sales of assets at the end of last year, freeing huge amounts of cash for reinvestment.

And investments that compete with stocks--real estate, bonds, money-market funds and commodities--still seem relatively unattractive. “There’s a lot of liquidity out there, and few good alternatives,” said Ben Niedermeyer, vice president and portfolio manager at Janus Capital, an investment firm in Denver. “It’s a choice-of-last-resort market.”

Significantly, records were also set by gauges of market activity that are broader than the Dow Jones industrial average, which is based on the stocks of only 30 blue-chip companies.

Other Indexes Up

The Standard & Poor’s 500-stock index jumped 6.07 to 273.91, the New York Stock Exchange composite index rose 3.07 to 155.97, the Dow Jones utilities index gained 3.51 to 227 and the American Stock Exchange index spurted 5.03 points to 296.48. All four marks were new records.

Advancing stocks outnumbered declining issues on the New York Stock Exchange by a margin of 1,195 to 434.

In over-the-counter trading, the NASDAQ index gained 3.62 to 393.17. Advancing issues in that market outnumbered declining stocks by a smaller ratio of 10 to 7.

Other factors affecting the day’s frenzied trading were computerized buy-programs tied to futures activity, and “short-covering”--the buying by investors who had sold short, gambling that the market would decline. Adding to the general enthusiasm was a favorable prediction by market forecaster Robert R. Prechter that the market will not pull back significantly until it reaches the 2,300 level.

Such a pullback, if it occurs, will be only a temporary reversal, he added.

Continued Strength Seen

Gene Seagle, market analyst with Gruntal & Co. in New York, said the performance of the broader indexes--particularly the Standard & Poor’s 500-stock index and the New York Stock Exchange index--suggests that the rally will remain strong for many sessions.

“That’s healthy. You’ll see these advances start to thin out before you see any major correction,” he predicted. And he noted that market downturns in the last two years have never shaved more than 8% from the value of the Dow Jones index.

The day’s trading came after West Germany cut its discount rate, a move that might be expected to help American markets by increasing confidence in dollar-denominated investments. But bond prices were flat, suggesting that the German rate cut had not immediately helped the U.S. stock market.

High-technology stocks were among the strongest gainers, due, analysts said, to recent favorable earnings reports and signs that capital spending might be about to pick up. International Business Machines rose $4.125 to $127.125, on volume of 2.3 million shares, which made it the Big Board’s most active stock.

Digital Equipment rose $6.375 to $146.75, while Cray Research jumped $8.125 to $114. Apple Computer rose $3.50 to $52.50 on trading of 2.1 million shares, as Tandem gained $5 to $54.25 in volume of 1.4 million shares.

Data General Down

Lower earnings tripped others in the high-technology group. Data General was down $2.25 at $36 after reporting that first-quarter earnings rose to 12 cents a share, less than had been expected.

The stock of Lorimar-Telepictures, which has bounced around in the last few days, moved up $1.625 to $19 on trading of 1.8 million shares, after a favorable recommendation from Merrill Lynch analyst Harold Vogel. The stock was the most actively traded on the American Exchange.

Home Shopping Network, a stock that has nearly doubled in value this month, advanced an additional $4.50 to $33.50, as 1.6 million shares traded hands.