Dow Advances 18.02 to a New Post-Crash High
Wall Street’s blue chip Dow index advanced to a new post-crash high today as investors carried the stock market’s rally through a seventh consecutive session.
The Dow Jones industrial average finished up 18.02 points at 2,532.63, bringing its gain since the start of last week to about 92 points.
Advancing shares outnumbered declines 4 to 3 in moderate New York Stock Exchange volume of 160.55 million shares.
The market, which has advanced on expectations of falling interest rates and renewed takeover speculation, faltered earlier in the day. Traders said investors were growing cautious ahead of a spate of June economic reports due Friday that could contain some unpleasant surprises.
But futures-related program trading kicked in late in the session to push the Dow index to a new post-crash closing high, past the June 23 finish of 2,531.87.
Bond Prices Flat
Bond prices were unchanged to slightly lower in dull early trading today.
The Treasury’s benchmark 30-year bond was down 5/32 point, or about $1.50 per $1,000 face amount, around midday. Its yield, which moves in the opposite direction from its price, held steady at 8.03% from late Tuesday.
Analysts said trading was extremely light in the absence of economic news to move the credit markets.
William Sullivan, director of money market research for Dean Witter Reynolds Inc., said a Treasury auction later today on the seven-year note contributed to the decline.
“I think basically dealers are beginning to soften prices up slightly in an attempt to garner some interest in the auction,” he said.
The auction of $7.25 billion in notes is designed to raise $2.8 billion in cash for the Treasury.
A slightly lower dollar this morning also was lending a weak tone to the market, but wasn’t a significant factor, Sullivan said.
In the secondary market for Treasury bonds, prices of short-term governments were unchanged, intermediate maturities were down 1/32 point to 5/32 point and long-term issues fell from 1/8 point to 7/32 point, according to Telerate Inc., the 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 all outstanding Treasury issues with maturities of a year or longer, fell 0.98 to 1,192.00.
In corporate trading, industrials were lower. Moody’s investment grade corporate bond index, which measures total return on a portfolio of 80 corporate bonds with maturities of five years or longer, fell 0.22 to 329.63.
Yields on three-month Treasury bills fell to 7.98% as the discount lost 1 basis point to 7.73%. Yields on six-month bills were down to 7.83% as the discount fell 4 basis points to 7.44%. Yields on one-year bills dropped to 7.81% as the discount fell 4 basis points to 7.29%.
