Dow Jumps 41.83 to Near Record : Program Trades Push Rally to Close at 2,932

The stock market swept ahead to a 3 1/2-week high today, rebounding from Tuesday’s setback.

The Dow Jones average of 30 industrials, which had fallen 23.27 points on Tuesday, climbed 41.83 points to 2,932.67, its highest close since it stood at a record 2,935.89 on June 15.

Advancing issues outnumbered declines by nearly 2 to 1 on the New York Stock Exchange, with 969 up, 498 down and 517 unchanged.

Big Board volume totaled 162.22 million shares, against 147.63 million in the previous session.

The NYSE’s composite index gained 2.35 to 197.11.

The advance picked up momentum as the session progressed, propelled by computer-program buying from professional traders engaged in multiple strategies involving stock-index options and futures.

Analysts said stocks also seemed to benefit from a slight decline in open-market interest rates.

Prices of long-term government bonds edged upward in the credit markets, putting their yields in the 8.55%-8.60% range.

But perhaps the biggest plus, brokers said, was the market’s steady showing of late in the face of a succession of disappointments as companies begin to make their earnings reports for the second quarter of the year.

Bond prices headed higher at midday today, reflecting the success of Tuesday’s auction of savings and loan bailout bonds by the Resolution Funding Corp.

The Treasury’s key 30-year bond was up 1/2 point, or $5.00 per $1,000 face amount. Its yield, which falls when prices rise, was down to 8.52% from 8.57% late Tuesday.

Prices of shorter-term issues also rose.

Bond prices had been falling since last Thursday, with traders concerned about the market’s ability to absorb new government securities up for auction and slim prospects for lower interest rates.

But the market perked up today, analysts said, after Tuesday’s auction, in which Refcorp, the agency set up to help finance the thrift bailout, sold $5-billion worth of 30-year bonds at an average yield of 8.93%.

Refcorp received bids totaling $15.5 billion, or more than $3 in bids for every $1 in bonds sold. Demand was stronger than in two earlier sales of 40-year bailout bonds.

“Obviously the Refcorp auction went well,” said Carl Napolitano, market strategist at R. C. Government Securities.

But traders were keeping their eyes on another new issue this afternoon--the sale of $8 billion in seven-year notes.

Analysts said the market will also take cues later this week from two economic indicators due for release on Friday: June retail sales and the June producer price index.

By midday in the secondary market for Treasury bonds, prices of short-term governments gained 3/32 point, intermediate maturities rose by 5/32 point to 11/32 point and long-term issues rose as much as 1/2 point, according to Telerate Inc.