FINANCIAL MARKETS : Stocks : Stocks Keep Up Brisk Pace as Dow Rises 24.19

The stock market kept moving ahead Monday, following through on its strong rally at the end of last week.

The Dow Jones index of 30 industrials climbed 24.19 to 2,463.89 on top of its 56.82-point jump Friday, establishing a new post-crash high for the second straight session.

Advancing issues outnumbered declines by about 5 to 3 in nationwide trading of New York Stock Exchange-listed stocks, with 927 up, 576 down and 491 unchanged.

Big Board volume totaled 179.35 million shares, down from 221.49 million Friday. Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 212.53 million shares.

Analysts said Friday’s surge prompted buying of stocks by money managers at investing institutions who were fearful of missing out on a continuing advance in stock prices.

The catalyst for the market’s latest advance came Friday in the government’s report of a smaller-than-expected 0.4% increase in the producer price index of finished goods for April.

That sent open-market interest rates tumbling and increased hopes that the Federal Reserve was succeeding in its effort to curb inflation without pushing the economy into a recession.

As the new trading week began, there was talk of more favorable inflation news to come when the monthly data on the consumer price index is issued Thursday.

Some analysts cautioned, however, that those hopes might not be fulfilled. Wall Street estimates call for a CPI increase of 0.5% to 0.8%, after a rise of 0.5% in March.

Blue Chips Fare Well

Hewlett-Packard led the active list, down 3 3/4 at 53 3/8 on turnover of about 3.4 million shares. The company said its operating results for the fiscal quarter ended April 30 fell short of analysts’ estimates.

But the selling in that prominent stock did not spread to other blue chip and technology issues.

Gainers among the blue chips included General Electric, up 1 1/4 at 52 1/4; International Business Machines, up 2 at 112 3/4; American Telephone & Telegraph, up 1/2 at 34 1/2, and General Motors, up 7/8 at 40 3/4.

In Tokyo, stock prices ended lower in the slowest trading this year with investors reluctant to buy stocks with the yen falling against the dollar. The Nikkei index lost 150.04, or 0.44%, to 33,716.29 after closing down 215.16 Friday.

In London, share prices rose in subdued trading on the London Stock Exchange, boosted by Wall Street’s healthy performance Friday and a strong advance by the dollar. At the close of trading, the Financial Times 100-share index was up 14.2, or 0.7%, at 2,149.9.

Currency

The dollar surged in foreign exchange Monday, reaching more than two-year highs against several key currencies in sometimes hectic worldwide trading, despite continued central bank intervention.

Gold prices declined. Republic National Bank of New York said its late bid was $374.10, down $2.15.

Currency dealers said several factors helped strengthen the dollar, including firmness in U.S. interest rates and political instability in Japan because of Prime Minister Noboru Takeshita’s scandal plagued resignation.

Corporate currency buyers and speculators have also been encouraged by the dollar’s ability to shrug off last week’s strong intervention by central banks, dealers said.

They said reports of moderate dollar selling by the Bank of Japan and the Federal Reserve throughout the trading session Monday also did little to change market sentiment toward the dollar.

“It’s clearly the preferred investment vehicle right now for global investments,” said Earl I. Johnson, a trader at Harris Trust & Co. in Chicago. “It’s kind of developing a bandwagon effect.”

The dollar was strongest against the West German mark in U.S. dealings, reaching a nearly 2 1/2-year high. It also rose sharply against the Japanese yen and British pound, although profit taking brought it down from its highs of the day.

In Europe, the dollar reached a 34-month high against the Swiss franc, 28-month highs against the West German mark and the French franc, a 19-month high against the British pound and an eight-month high against the Italian lira.

All European markets, except in Britain and Italy, were closed Monday for the Pentecost holiday.

In Tokyo, the dollar reached its highest level in 18 months, closing up 1 Japanese yen at 136.80 yen. The dollar traded at 137.22 yen in London and at 137.145 yen in New York, up from 136.10 yen Friday and the highest level since late December.

In London, the British pound dropped to $1.6385 from $1.6615 Friday. Sterling fetched $1.6410 in New York, up from $1.6615, a five-month high for the dollar.

Other late dollar rates in New York, compared to late rates on Friday, included: 1.9389 West German marks, up from 1.9195; 1.7370 Swiss francs, up from 1.7175; 1.1897 Canadian dollars, up from 1.1879; 6.5550 French francs, up from 6.4880, and 1,409.00 Italian lire, up from 1,398.75.

Late dollar rates in London, compared to rates in Europe late Friday: 1.9415 German marks, up from 1.9195; 1.7438 Swiss francs, up from 1.7080; 6.5725 French francs, up from 6.4870; 2.1905 Dutch guilders, up from 2.1407; 1,411.00 Italian lire, up from 1,385.50, and 1.1905 Canadian dollars, up from 1.1868.

Credit

Government bond prices slipped Monday in the wake of a powerful rally last week that had been ignited by signs of modest inflation.

Corporate and municipal bond prices, however, finished slightly higher.

The Treasury’s benchmark 30-year bond lost 1/8 point, or about $1.25 for every $1,000 in face value. Its yield edged up to 8.84% from 8.83% late Friday.

The 30-year Treasury bond had surged 25/16 points, or more than $23 per $1,000 in face amount, during Friday’s buying spree.

In the secondary market for Treasury securities, prices of short-term government issues were down 3/16 point, intermediate maturities were down 1/8 point and long-term issues were mostly down by about 1/16 point, according to Telerate Inc., a financial information service.

Yields on three-month Treasury bills held at 8.46% as the discount was steady at 8.19%. Yields on six-month bills increased to 8.75% as the discount rose 10 basis points to 8.29%. Yields on 1-year bills moved ahead to 8.84% as the discount rose 10 basis points to 8.19%.

The federal funds rate, the interest on overnight loans between banks, was quoted late in the day at 9.8125%, up from 9.5625% late Friday.

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