Dow Soars 49.57 to New All-Time High

Prices surged higher in light trading on Wall Street today as technology stocks rebounded from Friday’s sharp losses and helped propel the Dow Jones industrial average to another closing high.

The industrials gained 49.57 to close at 2,870.49, surpassing the index’s previous high of 2,856.26, set just last Wednesday.

Advancing issues outnumbered decliners by a margin of about 11 to 4 on the New York Stock Exchange, with 1,107 up, 427 down and 454 unchanged.

Big Board volume totaled 137.41 million shares, against 120.25 million in the previous session.

The NYSE’s composite index rose 2.86 to 196.57.

At the American Stock Exchange, the market value index rose 2.72 to 362.56.

Technology issues had pulled the market sharply lower on Friday after Adobe Systems, a computer software company, said its earnings for the second quarter and full fiscal year were likely to fall short of analysts’ estimates.

But the high-tech stocks did an about-face today, in part because of a Barron’s article that said International Business Machines was on an upward course after several laggard years.

IBM was among the big gainers today.

Rising bond prices, which often help support the stock market by easing concerns about interest rates, did so again today. The Treasury’s bellwether 30-year bond was up about $4 for each $1,000 in face value by late afternoon.

Analysts said the stock market sentiment appeared positive despite Friday’s 35-point drop in the Dow Jones industrial average. They said early signs of weakness brought buyers back into the market.

Some computer-program buying was reported today, and prices surged higher late in the session as investors who had been on the sidelines jumped in to avoid being left out of the rally.

Analysts noted, however, that with a light volume, it remained to be seen if the gains would hold up.

The financial markets were closed Monday for Memorial Day.

John V. Sebastian, executive vice president at Clayton Brown & Associates in Chicago, said bonds were benefiting from the dollar’s strength against the Japanese yen in foreign exchange today.

Otherwise, “There’s not a whole lot going on. It’s post-holiday recouping,” he said.

In the secondary market for Treasury bonds, prices of short-term governments rose 1/16 point, intermediate maturities rose from 1/16 point to 3/16 point, and long-term issues rose as much as 1/8 point, according to Telerate Inc., a 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 federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8 1/4%, down from 8 5/16% late Friday.