Stronger Dollar, Bonds Cited : Dow Up 25.35 to New High in Broad Rally
The stock market moved back into record territory Tuesday, propelled by a rally in the dollar and Treasury bonds.
The Dow Jones index of 30 industrials reached another record close, gaining 25.35 to 2,722.42. It was the 55th record high for the closely watched barometer since the beginning of the year, when the average stood at 1,895.95.
Advancing issues outpaced decliners by a margin of about 7 to 4.
Big Board volume totaled 213.48 million shares, against 149.35 million in the previous session.
The dollar, boosted by heavy buying by central banks trying to stem its decline, ended a string of losing sessions, and analysts said the stock market, which has fallen in some recent sessions because of the dollar’s weakness, responded to the currency’s turnaround.
Tobacco Issues Gain
Among the standouts in the stock market were tobacco issues, which soared after a federal appeals court ruled that warnings about the hazards of smoking on cigarette packs are sufficient to protect tobacco companies from lawsuits stemming from smokers’ sickness or death. RJR Nabisco jumped 3 3/8 to 68 7/8, and Philip Morris soared 6 3/4 to 119 7/8.
McGraw-Hill Inc. closed up 7 5/8, at 80 1/8, apparently reacting to a published report that Minneapolis investors Irwin Jacobs and Carl Pohlad have bought 4% of the New York-based publishing company. At that price, its 50.5 million outstanding shares are worth more than $4 billion.
Calls Not Returned
Jacobs, chairman of Minstar Inc., and Pohlad, an owner of the Minnesota Twins baseball team, did not return phone calls seeking comment on the report, which appeared in USA Today. A McGraw-Hill spokeswoman said the company is unable to confirm the purchase and has not been in contact with the two investors, who are estimated to have a combined net worth of $900 million.
In the bond market, meanwhile, the Treasury’s 30-year bond advanced 1/2 point, or $5 for every $1,000 in face value. Its yield fell to 8.94% from 8.98% on Monday.
Yields on three-month Treasury bills rose 3 basis points to 6.20%. The six-month bills fell 4 basis points to 6.19%, and the one-year bill fell 1 basis point to 6.58%.
In corporate bond trading, industrial and utility bonds rose point in light trading.
Among municipal issues, general obligations and revenue bonds rose point in moderate trading.
The federal funds rate, the interest on overnight loans between banks, was quoted at 6.875%, up from 6.75% on Monday.
