Dow Resumes Its Rally, Gains Another 12.03

The stock market pushed ahead to new highs today, resuming its recent rally.

The Dow Jones average of 30 industrials, which had slipped 2.77 on Wednesday, rose 12.03 to 2,831.71.

Advancing issues outnumbered declines by about 5 to 4 on the New York Stock Exchange, with 825 up, 658 down and 490 unchanged.

Big Board volume totaled 164.77 million shares, against 159.81 million in the previous session.

The NYSE’s composite index gained .35 to 193.49.

Most of the gains came early in the session, encouraged by a brief drop in open-market interest rates.

As the day passed, however, rates turned higher. Yields on long-term government bonds climbed to the 8.65%-8.69% range.

In the economic news, the Commere Department reported that the nation’s trade deficit increased to $8.45 billion in March from a 6 1/2-year low of $6.10 billion the month before.

Brokers said the latest figure, although larger than expected, didn’t significantly discourage the belief that the United States has been gradually improving its competitive position of late in world markets.

U.S. Treasury bond prices firmed slightly today in moderate early trading despite a government report showing a larger-than-expected March trade deficit.

The bellwether 30-year bond was up around 1/8 point by midday, or $1.25 per $1,000 face amount, after losing around $1.50 on Wednesday.

Its yield, which moves inversely to the price, slipped to 8.61% from 8.63% late Wednesday.

Market analysts said bond traders generally shrugged off today’s Commerce Department report on the March trade shortfall.

Although most economists had been predicting a March deficit of around $7.5 billion, “it didn’t seem the numbers were that negative,” said Elizabeth Reiners, a vice president and economist at Dean Witter Reynolds Inc. in New York.

She said the market sentiment is that the trade gap will eventually improve this quarter because of the dollar’s recent decline in foreign exchange.

Bond traders are concerned about the trade figures because they can often influence the dollar. When the trade gap widens, the dollar sometimes falls, thereby hurting the value of dollar-denominated securities like bonds.

Adding an early boost to bond prices today was speculation that the Federal Reserve might be easing its credit stance a bit, but when the Fed failed to take any action today, prices retreated slightly, Reiners said.

In the secondary market for Treasury bonds, prices of short-term governments rose between 1/16 point and 1/8 point, intermediate maturities rose around 3/16 point and long-term issues were up around 1/8 point, according to the Telerate 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 1.87 to 1,150.85.