Dow Manages 4.03 Rise to Stay on Record Roll

The stock market eked out a small gain today, marking another record-high close as the market recovered from losses earlier in the day.

The Dow Jones average of 30 industrials edged up 4.03 to 2,856.26, reaching a record closing high for the third straight session.

Advancing issues and declines were about evenly balanced in the overall tally on the New York Stock Exchange, with 753 up, 739 down and 517 unchanged.

Big Board volume totaled 172.33 million shares, against 203.35 million in the previous session.

The NYSE’s composite index rose .27 to 195.85.

The Commerce Department reported this morning that new factory orders for durable goods fell 4.1% in April, providing a fresh sign of weakness in the economy.

As the day passed, the news helped to foster a moderate decline in interest rates.

Prices of long-term government bonds rose almost $5 for each $1,000 in face value, reducing their yields to the 8.56% to 8.59% range.

Despite that positive influence, however, brokers some traders were intent on cashing in on the stock market’s recent gains.

Earlier today, U.S. Treasury bond prices were narrowly mixed in volatile trading.

The government’s bellwether 30-year issue traded down around 1/16 point by midday, or 62.5 cents per $1,000 face amount, while its yield stood at 8.60%, unchanged from late Tuesday.

Shorter-term bonds, meanwhile, were slightly higher in price.

“Prices have been swinging pretty wildly today,” said Kevin Flanagan, a money market economist for Dean Witter Reynolds Inc. “The market can’t seem to figure out which way it wants to go.”

Treasury bonds started out lower overseas, then rallied on the news of plunging gold prices in Europe and after the government reported a the drop in April durable goods orders, Flanagan said. But investors eager to cash in on the bond rally eventually pushed prices down, he said.

News of a drop in gold prices and a weak durable goods report would be considered bullish for bonds, since it lessens the prospects of higher inflation, thereby keeping interest rates from rising. Bond prices move inversely to interest rates.

In the secondary market for Treasury bonds, prices of short-term governments were unchanged to 1/16 point higher, intermediate maturities rose as much as 3/32 point and long-term issues fell around 1/16 point, the Telerate Inc. financial information service reported.

The movement of a point equals 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, rose 0.04 to 1,149.73.

Yields on three-month Treasury bills fell to 7.89% as the discount declined 8 basis points to 7.65%. Yields on six-month bills fell to 8.12% as the discount declined 4 basis points to 7.71%. Yields on one-year bills fell to 8.16% as the discount fell 5 basis points to 7.61%.

The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8 3/16% around midday, unchanged from late Tuesday.