STOCKS : Dow Spurts 25 to 4th Record in 6 Sessions
The stock market roared to a record high for the fourth time in six sessions Monday.
Heavy buying in technology and consumer issues helped it resume its upward course after a brief lapse Friday.
The Dow Jones index of 30 industrials climbed 24.77 points, or 0.88%, to close at 2,844.68, eclipsing the previous peak set Thursday--2,831.71.
In the broader market, advancing issues outnumbered declines by about 9 to 5 in nationwide trading of New York Stock Exchange-listed stocks. A total of 997 were up, 538 down and 486 unchanged.
Big Board volume came to 166.28 million shares, against 162.52 million Friday.
In the wake of an 11.80-point decline in the Dow index Friday, stock prices started the day weaker. They picked up speed by late morning as computer-driven program buying kicked in. The Dow climbed as high as 31 points during the session.
As in previous rallies, buyers were attracted to familiar names, especially in technology--IBM, Digital Equipment and Microsoft, for example.
“The quality of leadership . . . this is what you love to see,” said Alfred Goldman, director of technical research at A. G. Edwards & Sons.
Traders were encouraged by the breadth of the rally. It reached the broader averages and the over-the-counter stocks that have languished as blue chips have roared to record highs.
Last week, the market advanced when government reports indicated that inflation was easing--a sign that the Federal Reserve would have more room to lower interest rates. Lower rates stimulate business activity and tend to boost stock and bond prices.
Goldman, saying declarations of a bull market are premature, expects the Dow to fluctuate for awhile in a narrow range. He believes that the 30-share index could rise to 2,900 or 2,950 before a substantial downturn.
“We’re being lifted to the top of a nine-month trading range,” he said. “I don’t think fundamentally or technically the underpinnings justify the start of a new bull market.”
William LeFevre, market strategist at Advest Group Inc., disagreed. “I think the market is going a lot higher. I think the fundamentals are there.”
In individual issues Monday, Philip Morris rose 3/4 to 44 1/2, IBM gained 1 5/8 to 117, General Motors advanced 1 1/8 to 49 and Boeing added 1 1/4 to 79 1/8.
Among high-tech stocks, National Semiconductor gained 1/2 to 8 1/4, Advanced Micro Devices rose 3/8 to 10 3/4 and Compaq Computer climbed 2 3/4 to 121 3/8.
Microsoft, which is expected to unveil an important new software package today, jumped 2 to 70 1/4.
American Cyanamid’s shares were up 1 7/8 to 56 3/4 on speculation that it may be a takeover target of Procter & Gamble. P&G;, which forecast a strong 1990, rose 1 1/8 to 77 5/8.
Cable television stocks gained on growing beliefs that new industry regulations will be less onerous than previously thought. Telecommunications Inc., the nation’s biggest cable-TV company, added 1 1/8 to 15 7/8. Second-ranked Time Warner jumped 4 to 99 1/4.
Louisiana General Services jumped 3 1/8 to 20 1/4. The company agreed to be acquired by Citizens Utilities Co. through an exchange of each Louisiana General share for about 0.67 of a Citizens Class B share.
Harnischfeger fell 1 3/4 to 19 7/8. The company reported earnings for the fiscal quarter ended April 30 of 55 cents a share, against 53 cents in the comparable period last year.
Tokyo stocks were down at the close but off their lows as most buyers and sellers watched from the sidelines. The key 225-share Nikkei index closed down 248.67 points, or 0.78%, to 31,765.05.
Prices advanced on the London Stock Exchange, pushed higher by strength in the stock-index futures market. Trading was light. The Financial Times 100-stock index rose 13 points to 2,282.1.
In Frankfurt, West Germany, stock prices weakened, with uncertainty about the future trend of interest rates and worries about German monetary union overshadowing positive corporate news. The DAX index of 30 blue chip stocks fell 32.41 to 1,811.18.
CREDIT Bonds Up on News of Budget Surplus U.S. Treasury securities closed slightly higher Monday after the federal government reported a record budget surplus for April.
The government’s bellwether 30-year bond rose 1/8 point, or about $1.25 per $1,000. That dropped its yield to 8.68% from 8.69% late Friday.
Shorter-term issues also rose slightly in quiet trading.
Steven A. Wood, economist for BankAmerica Capital Markets in San Francisco, attributed the modest increases to April’s larger-than-expected budget surplus.
The Treasury Department said a surge in income tax payments helped the government post a $42.52-billion budget surplus last month, cutting the deficit for the fiscal year that started last Oct. 1 to $108.34 billion.
“The report made people think that the underlying deficit situation isn’t quite as bad as initially thought,” he said.
But Wood said activity was very light. Many traders, he said, are awaiting economic data to be released later this week, including revised figures on first-quarter growth in the gross national product.
The federal funds rate, the interest rate banks charge each other on overnight loans, was 8.188%, unchanged from late Friday.
CURRENCY Interest Speculation Sends Dollar Higher The dollar gained ground in worldwide foreign exchange as traders speculated that U.S. interest rates would hold steady for the time being.
Currency dealers said the market believes that the Federal Reserve will decide against easing credit policy anytime soon, and that should keep interest rates at their current levels. Higher rates tend to support a currency.
Also boosting the dollar, particularly against the West German mark, were reports of political discord in West Germany over reunification plans with East Germany, dealers said.
But Gabriele Schmitt, a corporate dealer for Bank of New York, downplayed Monday’s dollar advance. She said trading was so light before the Memorial Day holiday that any movement in the dollar might have been exaggerated.
“There really is not any liquidity in the market to have a reasonable trading pattern,” she said.
COMMODITIES Soybean Prices Continue to Erode Soybean futures prices fell sharply on the Chicago Board of Trade, continuing a recent trend linked to weather conditions and greater availability of South American supplies.
Grain futures also retreated in Chicago. On other commodity markets, energy futures tumbled, precious metals were mixed and livestock and meat futures were mixed.
Soybean futures settled 10 to 11.75 cents lower, with the contract for delivery in July at $6.105 a bushel.
Wheat futures ended 2.50 to 3 cents lower, with July at $3.37 a bushel; May corn was 4.50 to 5.25 cents lower, with July at $2.77 a bushel, and oats were 2.50 cents to 3.25 cents lower, with July at $1.5125 a bushel.
All contracts for May deliveries of grains and soybeans expired at noon Monday. The May soybean contract went off the board at $6.045 a bushel, May wheat expired at $3.835, May corn at $2.80 and May oats at $1.445.
July soybeans have dropped by 50 cents a bushel since May 10, when the Agriculture Department issued a report projecting a bountiful 1990 harvest of 1.9 billion bushels and an increase in the U.S. soybean stockpile.
Analysts said rising South American soybean exports have bolstered perceptions that Brazil and Argentina can handle current global demand--and at prices generally lower than in the United States.
