Dow Closes ’91 Up 4.92 to Set Another Record

Wall Street stocks finished 1991 on a triumphant note as a late surge of year-end buying Tuesday sent several key market barometers to their fourth straight day of all-time highs.

The Dow Jones industrial average ended at a record 3,168.83, up 4.92 points. The blue chip gauge ended the year up 535.17 points, or 20.3%.

In other year-end market news:

* The bond market rallied, pushing the yield on the Treasury’s bellwether 30-year bond to its lowest level in nearly five years.

* The dollar closed the year at 124.78 yen. A year ago, it was at 135.50 yen.

* Gold for spot deliveries finished the year at $354.10 an ounce, down 10.2% from a year ago.

On Wall Street, the other market barometers rallying to all-time closes included the NASDAQ composite, which rose 6.59 to 586.34, and the Standard & Poor’s 500 stock index, which gained 1.95 to 417.09.

For the year, the NASDAQ surged nearly 57%, while the S&P; 500 gained 26%.

But the day’s achievements were not without a struggle. An opening burst was quickly wiped out late in the morning amid computerized program selling and profit taking. Analysts said the market was overdue for some consolidation, and program selling put sellers in control.

However, investors’ efforts to dress up their portfolios for the year’s end and the market’s blistering upside momentum powered stocks higher by the close.

Advances beat losers 1,244 to 600 on heavy turnover of about 248.5 million shares. About 245.6 million shares traded Monday.

Stock analysts said the market mostly ignored the latest round of reports describing economic stagnation.

The Commerce Department reported that its chief economic forecasting gauge of future economic activity fell 0.3% in November. Though the index of leading economic indicators showed its biggest setback in 10 months, the decline was within many economists’ expectations.

Thomas Walsh, head of trading at Nikko Securities, said the market’s strong momentum could carry the Dow to 3,200--just 30 points away.

But the market’s rally, touched off by the one-point discount rate cut Dec. 20, has some analysts worried.

“The main reason people are buying stocks is because of interest rates,” said Ricky Harrington, technical analyst at Marion Bass Securities.

Lower interest rates make alternative investments such as bonds and bank money market accounts less attractive, leaving stocks the only game in town.

Among the day’s highlights:

* Mutual fund managers saw their fortunes rise. Dreyfus rose 3/4 to 49 1/4; Schwab gained 1 1/4 to 30 3/8.

* Smithkline Beecham was up 3 1/8 to 79 5/8 after the Food and Drug Administration granted the company approval to market a new anti-inflammatory drug that presents a low risk of causing ulcers.

* The most actively traded issue was Westinghouse Electric, up 3/8 at 18, followed by RJR Nabisco, down 3/8 at 10 3/4; American Telephone & Telegraph, down 1/4 at 38 1/8, and Philip Morris, down 3/8 at 80 1/4.

* Among blue chips, J. P. Morgan was down 3/4 at 68 5/8, General Motors up 3/8 at 28 7/8, Sears, Roebuck up 1 3/8 at 37 7/8 and Dow Chemical up 3/8 at 53 3/4.

* Kidder Peabody analyst Daniel Barry repeated buy ratings on five retailers he expects will have above average growth in 1992. Among them, Toys R Us climbed 1 3/8 to 32 5/8, Lowes surged 2 3/4 to 34 1/8, and Caldor rose 1 1/2 to 18.

* Shares of Immunex gained 3/4 to 59 1/4, and Regeneron Pharmaceuticals added 7/8 to 18 1/8 after Merrill Lynch recommended the two.

* Owens-Corning Fiberglas, which rose 1 1/8 Monday, gained another 1 3/8 to 22 3/8. Analysts said investors continued to respond positively to the appointment of Glen H. Hiner as chairman and chief executive.

In overseas trading, London stocks surged ahead, with the Financial Times-Stock Exchange 100-share index up 73.1 points to 2,493.1. Exchanges in Frankfurt and Tokyo were closed for the New Year holiday.

Credit

Bond prices were mixed as many traders squared their positions before closing their books for 1991.

The price of the Treasury’s 30-year bond, which rose 7/8 point Monday, gained 19/32 point, or about $5.94 per $1,000 in face amount. Its yield, which drops when the bond’s price rises, sank to 7.39% from 7.44% Monday.

The yield was the lowest for a 30-year bond in nearly five years.

Analysts said momentum from Monday’s rally--which was sparked by new indications of economic weakness--carried over to Tuesday’s trading.

The federal funds rate, the interest on overnight loans between banks, was 4.0%, up from 3.5% Monday.

Currency

The dollar settled mostly lower on world currency markets in extremely light dealing, but was mixed compared to levels a year ago.

Traders said markets in the United States and Europe virtually ceased operating around midday.

In New York, the dollar closed the year at 124.78 yen, down from 125.60 Monday. A year ago, the dollar was trading at 135.50 yen.

It cost $1.8685 to buy one British pound, more expensive than Monday’s $1.8670 but cheaper than the $1.9345 of a year ago.

The dollar ended 1991 stronger against the German mark. In New York it settled at 1.5190 marks, down from 1.5192 Monday but up from 1.4885 a year ago.

Other dollar rates in New York, compared to Monday’s rates, included: 1.3590 Swiss francs, up from 1.3555; 5.1845 French francs, down from 5.1905; 1,149.25 Italian lire, down from 1,151.75, and 1.1555 Canadian dollars, down from 1.1578.

Commodities

Silver led a rally in precious metal futures prices that analysts attributed partly to stirrings of economic optimism.

On other commodity markets, grains and soybeans were mostly higher, oil futures rose and livestock and meat futures were mixed.

Most commodity markets closed early and will remain closed today for the New Year’s holiday.

On New York’s Commodity Exchange, silver for March delivery rose 3.4 cents to $3.912 an ounce. Spot silver deliveries rose 3.7 cents to $3.883.

Gold for spot deliveries rose $1.30 to close out the year at $354.10.

Light, sweet crude oil for February delivery rose 47 cents to $19.12 a barrel.

Comparing Investments in ’91

Most major stock indexes closed the year at all-time highs, while interest rates, gold and silver finished down sharply from a year ago.

Stock index

1990 1991 Pct. close close change NASDAQ industrials 406.05 668.95 +64.7% NASDAQ composite 373.84 586.34 +56.8% Dow transports 910.23 1,358.00 +49.2% Wilshire 5,000 3,101.36 4,041.10 +30.3% AmEx market value 308.11 395.05 +28.2% NYSE composite 180.49 229.44 +27.1% S&P; 500 330.22 417.09 +26.3% Dow industrials 2,633.66 3,168.83 +20.3% Dow utilities 209.70 226.15 +7.8%

Investment

1990 1991 Pct. close close change Gold (ounce, Comex) $394.20 $354.10 -10.2% Silver (ounce, Comex) $4.19 $3.88 -7.4% 3-month Treas. bill 6.44% 3.86% -2.58 pts. 10-year Treas. note 8.08% 6.70% -1.38 pts. 30-year Treas. bond 8.24% 7.40% -0.84 pts.