Dow Zooms 43 to New High as Stocks Rebound

The stock market rebounded in active trading today, resuming the vigorous rally that started with the new year and propelling the Dow Jones average of 30 industrial stocks to a new closing record.

The Dow Jones average of 30 industrials rose 43.17 to a record high of 2,150.45.

Advances outpaced declines by more than two to one on the New York Stock Exchange.

Big Board volume totaled 192.32 million shares, against 138.80 million in the previous session.

The NYSE’s composite index rose 2.22 to 155.85.

At the American Stock Exchange, the market-value index was up 3.74 at 297.83.

Traders said investors returned to the market with renewed gusto, regaining their confidence that had been badly shaken by the heavy losses that resulted from Friday’s chaotic session.

The “sea of liquidity” built up by cash-heavy financial institutions, foreign investors and others continues to bolster the market, said Larry Wachtel, an analyst for Prudential-Bache Securities. “We’re trying again for the upside. The market’s going to be unrelenting on the upside.”

The market rose from the start of trading, although the blue-chip Dow index retreated briefly in the afternoon because some investors cashed in profits.

“There’s a great deal of underlying strength and passion in this market,” said Theodore Halligan, an analyst for Piper Jaffray & Hopwood. “People have pretty well digested the violence of (Friday’s session).”

Traders noted the much smaller role in today’s session of “program trading,” or the use of computers by professional investors to buy and sell millions of dollars worth of stock and stock futures in minutes.

Program trading had an strong impact on the market Friday, when the Dow Jones industrials plunged about 110 points in an hour to end the day down 44.15 points from the record high of the previous day.

Stocks of industries that benefit especially from a falling dollar, such as pharmaceuticals and paper, were sharply higher today. These industries gain much of their revenue from exports, made more attractive by a weak dollar.

The bond market was little changed to slightly lower in quiet trading today as investors awaited details of the Treasury’s coming quarterly refinancing.

The government’s key 30-year bond was off 3/32 point while its yield remained at 7.48%, the same as late Monday. Corporate and municipal issues were unchanged to mixed.

Analysts said bondholders were reluctant to take any major position prior to Wednesday, when the Treasury is scheduled to announce details of the refinancing.

The auction is expected to total between $27 billion and $30 billion, and many investors are concerned that there may not be enough foreign interest in the dollar-denominated debt securities due to the weak U.S. currency on world markets.

In corporate trading, industrials and utilities were unchanged in quiet to moderate trading, Salomon Bros. reported.

Among tax-exempt municipal bonds, general obligation bonds were down point and revenue bonds rose point in light trading.

Yields on three-month Treasury bills were down 1 basis point to 5.48%. Six-month bills were unchanged at 5.43% and one-year bills were down 1 basis point at 5.45%. A basis point is one-hundredth of a percentage point.

The federal funds rate, the interest on overnight loans between banks, traded at 6 1/8%, unchanged from late Monday.