Dow Makes It 3 in a Row, Rises 6.46 to Another High
The stock market continued marching into record territory Thursday, as the Dow Jones industrial average hit its third record high in as many sessions.
After hovering near or below the break-even level for most of the day, the closely watched index turned up in the last hour to close at 2,244.09, a net gain of 6.46.
This followed Tuesday’s record close of 2,237.49 and Wednesday’s 2,237.63, also a record.
Gainers outnumbered losers by about eight to seven on the New York Stock Exchange.
Big Board volume came to 181.53 million shares, compared to 218.21 million shares Wednesday.
Analysts attributed much of Thursday’s gain in the Dow Jones average to heightened buying of Merck & Co., a health care company, in the last hour. Merck is included among the index’s 30 stocks. It closed at 147 3/4, up 6 3/8.
Overall trading was more even for virtually all of the session. Some investors took profits on recent gains. But the tone remained positive, analysts said.
“Every time we see sellers come in and the price concessions show up, buyers jump all over it,” said Alfred E. Goldman, an analyst at the St. Louis securities firm of A. G. Edwards & Sons Inc.
“What we have here is a time-out, not a top-out,” he added.
Little Effect
Several analysts said news events during the day had little effect on the stock market.
In the morning, the Commerce Department reported that the gross national product, the broadest measure of economic health, grew at a sluggish 1.3% annual rate in the final three months of 1986, weaker than was previously thought.
This was followed by congressional testimony by Federal Reserve Chairman Paul A. Volcker and Treasury Secretary James A. Baker III.
Volcker outlined the Fed’s money targets and economic outlook for 1987 before the Senate Banking Committee, while Baker answered questions from the Senate Banking The Treasury’s key 30-year issue rose around 1/2 point, or $5 per $1,000 face value, while its yield fell to 7.53% from 7.60% late Wednesday. Corporate bonds also gained, while municipal issues were mostly unchanged.
Rate Unchanged
The fed funds rate finished at 5.875%, unchanged from Wednesday.
In the secondary market for Treasury bonds, prices of short-term maturities ranged 1/8 point to 5/32 point higher, intermediate maturities ranged 1/16 point to 3/16 point higher and 20-year issues rose 7/16 point, according to the investment firm Salomon Bros.
The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.
In corporate trading, industrials rose point in moderate activity and utilities gained 3/8 point in light dealings, according to Salomon Bros..
Among tax-exempt municipal bonds, general obligations were unchanged in light trading and revenue bonds were also stable in thin activity, the investment firm said.
Yields on three-month Treasury bills fell 3 basis points to 5.55%. Yields on six-month bills slipped 1 basis point to 5.56% while one-year bills dropped 17 basis points to 5.84%.
A basis point is one-hundredth of a percentage point.
