The Rally Rolls On: Dow Pushes Ahead Again, Gains 15.89
Stock prices pushed ahead again today, extending the early-1989 rally that has carried the market to its highest levels since the 1987 crash.
The Dow Jones average of 30 industrials climbed 15.89 points to 2,222.32, less than 25 points shy of its close of 2,246.74 on Oct. 16 York Stock Exchange, with 899 up, 569 down and 509 unchanged.
Big Board volume totaled 183 million shares, up from 148.95 million in the previous session.
The NYSE’s composite index rose .61 to 159.26.
Analysts said traders were encouraged by the market’s drive Wednesday past the 2,200 level in the Dow Jones industrial average after a week-long struggle.
In addition, they cited a developing “bandwagon” effect as investors who had been bearish on the outlook for months felt increasing pressure to join in the rally.
The market’s steady advance since last fall has come without any support from interest rates, which have been rising.
Bond Prices Mixed
The Federal Reserve has continued to tighten credit, and many Wall Streeters still believe that the Fed might soon raise its discount rate.
Bond prices were mixed in early trading today.
The Treasury’s benchmark 30-year bond rose 1/32 point, or about 31 cents per $1,000 in face value. Its yield, which moves in the opposite direction from its price, was unchanged at 9.04%.
Wayne Lyski, a senior vice president at Alliance Capital Management, said the prices of Treasury, corporate and municipal bonds were virtually unchanged from late Wednesday.
He said the bond market was awaiting Friday’s release of wholesale price and retail sales figures for December.
In the secondary market for Treasury bonds, prices of short-term government issues rose 1/32 point, intermediate maturities rose 3/32 point and long-term issues ranged from up 1/32 point to up 3/16 point, according to Telerate Inc., a financial information service.
The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.
The Shearson Lehman Hutton daily Treasury bond index, which measures price movements on outstanding Treasury issues with maturities of a year or longer, rose 0.47 to 1,128.31.
In corporate trading, industrials were down slightly. Moody’s investment grade corporate bond index, which measures price movements on 80 corporate bonds with maturities of five years or longer, fell 0.19 to 294.26.
Yields on three-month Treasury bills rose to 8.56% as the discount rose 4 basis points to 8.28%. Yields on six-month bills rose to 8.91% as the discount rose 2 basis points to 8.42. Yields on one-year bills were unchanged at 9.12% as the discount remained at 8.46%.
A basis point is one-hundredth of a percentage point. The yield is the annualized return on an investment in a Treasury bill. The discount is the percentage that bills are selling below the face value, which is paid at maturity.
The federal funds rate, the interest on overnight loans between banks, was quoted at 9 1/8%, up from 9% late Wednesday.
