Dow Pushes Past 2,700 but Retreats, Closing Up 22.17 : Race to Join the Bull Market Keeps Big Board Volume Heavy
The stock market climbed to new highs Thursday, bouncing back from Wednesday’s spell of profit taking to make a brief run past the 2,700 level in the Dow Jones industrial average.
Dow Jones’ average of 30 blue chips, off 11.16 Wednesday, rose 22.17 to 2,691.49.
Volume on the New York Stock Exchange came to 217.07 million shares, down just a bit from 235.70 million Wednesday.
After surging ahead to record levels Monday and Tuesday, stock prices backed off a bit in Wednesday’s session.
Analysts said traders’ urge to cash in some of their gains had increased. But they also noted that the resulting pullback was only mild and spotty.
Brokers said there still appeared to be plenty of demand for stocks from investors scrambling to join in the bull market that began five years ago this week.
Bond Prices Higher
Bond prices also swept higher Thursday as the federal government completed the sale of $28 billion in new securities, and hopes rose that inflation will remain subdued.
The Dow Jones average of 30 stocks pushed briefly past 2,700 early in the afternoon, but then slipped back.
“After a one-day dip like yesterday, the market just comes right back to life because it hasn’t reached that stage of overenthusiasm,” said Richard McCabe, manager of the market analysis department at Merrill Lynch & Co. “Overenthusiasm tends to mark an important or near-term top, which isn’t here.”
McCabe said the market is being fueled by foreign investors, corporate stock repurchases and institutional buying.
In economic news, the Commerce Department reported that retail sales rose 0.8% in July, on top of an upward-revised increase of 1.4% the month before. That helped reinforce Wall Street’s optimistic view of the progress of the economy.
The department said part of the large change in the June data stemmed from an increase in car sales figures. Among the auto stocks, General Motors gained 1 1/2 to 91 1/2; Chrysler 1 1/8 to 44 1/2, and Ford Motor 5/8 to 109 1/8.
Gaining issues outnumbered losing issues by more than 4 to 3.
In the credit markets, the Treasury’s bellwether 30-year issue rose 1 3/8 point, or about $13.75 for every $1,000 in face value. Its yield fell to 8.81% from 8.94% Wednesday.
In corporate trading, industrials and utilities rose 1/2 point in moderate activity, Salomon Bros. said.
Among tax-exempt municipal bonds, general obligations rose 1/2 point and revenue bonds were up a full point in moderate trading.
Yields on three-month Treasury bills rose 1 basis point to 5.95%. Six-month bills fell 2 basis points to 6%, and one-year bills were off 4 basis points at 6.43%.
The federal funds rate, the interest on overnight loans between banks, traded at 6.68%, unchanged from Wednesday.
