Dow Extends Streak, Roars Ahead 20.53 : Strength of Dollar, Bonds Fuel Rally

The stock market powered its way Monday to the third day of a winning streak, turning a stable morning rally into a roaring finish on strength in the dollar and bond markets. The Dow Jones index of 30 industrials rose 20.53 to 2,294.82.

Advancing issues outnumbered declines by better than 2 to 1 in nationwide trading of New York Stock Exchange-listed stocks.

Big Board volume totaled 168.88 million shares, up from 151.79 million in the previous session.

Stocks drew strength from bonds, which more than recouped Friday’s losses.

Bonds rose on news that the economy cooled last month, alleviating upward pressure on interest rates. A report from the nation’s purchasing managers said the economy’s growth slowed to a two-year low in February, while employment slipped for the first time in nine months.

Trading Tentative

In addition, the dollar surged on a report in Tokyo quoting a senior Japanese finance official as saying that the dollar is trading near its bottom and that a stronger yen is not needed. “I think the market is being led by the strength in the dollar,” said block trader Bob Grohskopf at Morgan Stanley. “We’re having a very nice currency and bond market.”

“The economic news has become more mixed, with the purchasing agents saying that they’re seeing signs of more moderate growth,” added Mark Tavel, president of Rothschild Asset Management.

Despite the Dow’s gains, trading was still tentative ahead of Friday’s report on February U.S. unemployment, which will tell more about the economic expansion and its implications for inflation, traders said.

The big news of the session was the weekend merger agreement between Time Inc. and Warner Communications.

Analysts said the deal immediately touched off speculation that other companies in the entertainment and publishing industries might be candidates for mergers or takeovers.

Warner stock led the active list and jumped 2 3/8 to 48 1/4, while Time’s shares dropped 1 5/8 to 107 1/2. Analysts said Time’s decline in part reflected disappointment among traders who had been reckoning that the company might have become a takeover candidate at a higher price.

Chris-Craft Industries, which owns a 17% interest in Warner, gained 3 3/4 to 33 1/2.

Reebok Active

Elsewhere in the communications and entertainment group, Gulf & Western rose 2 1/2 to 45 7/8, MCA gained 2 1/8 to 53, Walt Disney added 1 1/4 to 77 5/8, Orion Pictures jumped 1 1/8 to 16 7/8 and Columbia Pictures Entertainment rose 1 to 18 3/8.

Reebok International, a maker of popular athletic shoes, rose 5/8 to 14 1/4 as the NYSE’s third most active issue on takeover speculation, traders said.

The Wilshire index of 5,000 equities closed at 2,912.439, up 28.321, or 0.98%, from Friday’s close.

The NYSE’s composite index of all its listed common stocks added 1.73 to 165.63.

Standard & Poor’s industrial index rose 4.04 to 340.39; its 500-stock composite index was up 3.63 at 294.81.

The NASDAQ composite index gained 2.27 to 406.26; the American Stock Exchange index closed at 327.99, up 1.77.

In foreign trading, prices fell in light trading Monday on the Tokyo Stock Exchange as investors waited on the sidelines in anticipation of a drop in stock prices because of the settlement of March futures contracts. The Nikkei 225-share index fell 123.24 to close at 31,876.86.

However, share prices on the London Stock Exchange rose, but trading activity was thin, as players began casting a cautious eye toward next week’s presentation of Britain’s fiscal 1990 budget. At the close, the Financial Times 100-share index was up 13.6, or 0.7%, at 2,072.8.