Scattered buying of blue chips lifted the Dow Jones industrial index Monday to its highest close since last October’s crash, as Wall Street carried Friday’s big rally into a new week.
The Dow index climbed 8.71 points to 2,158.96, moving it past the 2,158.61 close of July 5 that had stood as the high since the day before the 508-point Oct. 19 plunge.
It was the best close since Oct. 16, 1987, when the average ended at 2,246.42, already nearly 500 points below the August, 1987, high of 2,722.42.
The stock market jumped Friday after the government, in the first official report on the economy’s performance last month, said job growth remained modest in September, which reduced inflation worries.
“There was some cooling down in the economy and the markets are celebrating,” said market strategist Marshall Acuff with Smith Barney, Harris Upham & Co. “A momentum has been created there.”
Monday’s rally failed to spread to the broader market, as declines led advances 711 to 680 on the New York Stock Exchange. Big Board volume was 124.7 million shares, down from 216.4 million on Friday, when the Dow soared 42.50 points.
Analysts said the lack of supporting gains in the broader market reflected, in part, the absence of banks and other institutions closed for the Columbus Day holiday.
Although the U.S. government bond market was closed, corporate bonds edged higher.
Moody’s investment grade corporate bond index, which measures price movements on 80 corporate bonds with maturities of five years or longer, rose 0.23 to finish at 295.77.
“It’s constructive that we’ve broken out on the upside led by quality stocks,” said Robert Simpkins, technical analyst at Delafield Harvey Tabell Inc. “It might be premature to take this breakout to the bank. We need a broader-based confirmation.”
Technology Stocks Lower
A key stumbling block is the continued weakness in the technology sector, analysts said. Shares of semiconductor and computer companies fell as investors worried about poor demand prospects for personal computers, analysts said.
Among the declining issues were Apple Computer, off 1 to 38 1/2; Sun Microsystems, down 3/8 to 29 5/8; Compaq Computer, off 7/8 to 51 3/4, and Intel Corp. 1/8 lower at 24 3/4.
Super Rite Foods Inc. shares rose 5 to 22 after Rite Aid Corp. said it has decided to sell its 46.8% stake in Super Rite.
Time Inc., which has recently been the target of takeover rumors, rose 3 to 120 1/2.
ASA Ltd. picked up 3/4 to 39 1/2, Newmont Gold rose 2 to 35 7/8, Battle Mountain Gold edged 7/8 higher to 15 3/4 and Freeport-McMoRan Gold rose 5/8 to 13.
In London, share prices finished an uneventful session slightly lower Monday, as the market awaited a series of economic reports due later in the week.
The Financial Times 100-share index finished off 0.6 point, at 1,844.1.
The Tokyo Stock Exchange was closed Monday for a national holiday. Trading will resume today.
The government bond market was closed Monday because of the Columbus Day holiday, even though all stock and commodities exchanges were open as usual.