STOCKS : Dow Rises 37.56 to End Above Key 3,000 Level
Encouraged by strong earnings reports, blue chip stocks surged higher Thursday, hurtling the Dow Jones industrial average to a close above 3,000 for the first time in more than a month.
The Dow, in a 1.26% gain, ended up 37.56 points at 3,016.32. The key 30-share index last closed over the psychologically significant 3,000-point barrier on June 14, when it gained 35.33 points to 3,000.45.
In the broader market, gainers led losers 1,021 to 526. Big Board volume was an active 199.49 million shares as of 4 p.m. EDT, against 194.18 million at the same point Wednesday.
Investors received encouragement from positive earnings reports, analysts said. Among others, Consolidated Rail, American Telephone & Telegraph and American Brands shares gained after reporting results.
“Apple started the ball going by being up against a bad earnings report,” said Jack Solomon, a technical analyst at Bear Stearns. Despite an earnings loss, shares of the computer firm rose as investors responded to Apple’s cost-cutting actions.
The rise brought the Dow close to its all-time closing high of 3,035.33 on June 3.
Among market highlights:
* Apple Computer traded actively, gaining 2 3/8 to 44 7/8. It posted a third-quarter loss of 44 cents a share, but investors were encouraged by its restructuring.
* Consolidated Rail jumped 3 1/2 to 68 after reporting stronger-than-expected second-quarter earnings. Analysts raised estimates after the results.
* Shares of AT&T; added 1 5/8 to 39 5/8 after it reported a better-than-expected second-quarter profit. It said it may take charges of up to $4 billion by year-end, but that the charges will not prevent it from posting a profit.
* American Brands, after reporting better-than-expected second-quarter results, rose 3/8 to 40 1/2.
* Blockbuster Entertainment topped the NYSE volume list, down 1/8 to 10 1/4. The company reported second-quarter results that met analysts’ expectations.
* ADC Telecommunications tumbled 8 5/8 to 30 1/8 after it forecast lower-than-anticipated third-quarter results.
* Shares of Healthsource slid 3 7/8 to 19 3/4. Analysts slashed earnings estimates after the company said its results will be hurt by high litigation expenses.
Share prices fell in Tokyo, Frankfurt and London.
In Japan, the 225-share Nikkei average closed down 151.99 points at 22,908.71.
Germany’s 30-share DAX average ended a quiet session down 7.18 points to 1,618.33.
After setting record highs the two days before on renewed optimism about the domestic economy, British shares retreated. The Financial Times 100-share index closed down 13.7 points at 2,547.3.
Credit
Bond prices were higher in light trading despite two reports that pointed to a gradual economic recovery.
The Treasury’s bellwether 30-year bond rose 7/32 point, or $2.19 cents per $1,000 in face amount. Its yield, which moves in an opposite direction from price, was down to 8.47% from 8.49% Wednesday.
The federal funds rate, the interest on overnight loans between banks, was 5.75%, up from Wednesday’s 5.688%.
Currency
Scandals in Canada and Japan, coupled with the aftershock of central bank intervention last week, left the dollar mixed in active trading.
Dealers said accusations of corruption among prominent Canadian politicians had a particularly unsettling effect on currency markets, pushing the Canadian dollar down sharply against the American dollar. It rose to 1.158 Canadian dollars in New York from 1.148 Wednesday.
The Japanese yen continued to drift lower as details of misconduct among prominent securities firms continued to surface. The dollar rose to 137.65 yen, up 0.70 yen from Wednesday.
The greenback moved lower against most other currencies, however. It fell to 1.776 German marks from 1.791. The British pound closed at $1.6655, up from $1.6495 Wednesday.
Commodities
The prospect of rain and cooler temperatures in the Midwest next week sent corn and soybean futures prices plunging on the Chicago Board of Trade.
Corn was the hardest hit, with losses approaching the dime-a-bushel daily limit.
On other markets, sugar advanced, petroleum futures were lower and livestock and precious metals were mixed.
Wheat settled 2.50 to 4.50 cents lower, with the contract for delivery in July at $2.685 a bushel; corn was 3 to 7.50 cents lower, with July at $2.368 a bushel; oats were 2.50 to 3 cents lower, with July at $1.195 a bushel, and soybeans were 8.25 to 16.50 cents lower, with July at $5.27 a bushel.
Gold futures advanced, while silver was a loser on the Commodity Exchange in New York. Gold settled 40 to 50 cents higher, with the August contract at $370.90 an ounce. Silver lost 3.4 to 3.6 cents, with September settling at $4.412 an ounce.
On the New York Mercantile Exchange, light, sweet crude oil settled 20 cents lower, with August at $21.94 a barrel.
