Dow Advances 25.26 for Another Record Close : Market Overview
Highlights of Wednesday’s market activity, compiled from Times staff and wire reports:
* The Dow Jones industrial average jumped to a new high, as buying spread across a wide range of stocks. It was the Dow’s 10th record this year. Smaller stocks also reached new highs.
* Bond yields inched higher as the Treasury sold $11 billion in new 10-year notes. The auction was deemed a success.
Stocks
The Dow average rose 25.26 points, or 0.8%, to 3,276.83, surpassing the record of 3,272.81 set Feb. 4.
Among smaller stocks, the NASDAQ composite index rocketed 11.55 points, or 1.8%, to a record high of 644.92.
Analysts said the stock rally was supported by a renewed flow of cash from small investors, who snapped up issues perceived to be undervalued.
“You make the decision and get on the train but now you have to pick the right seat,” said Dave Mulanaphy, a portfolio manager at Van Lieu Capital.
Dick Stein, an analyst at MKI Securities, added, “This market does not want to give up. I don’t know what is keeping it up there besides smoke and mirrors. The public still continues to pour money in.”
Sentiment also was helped by the Treasury’s sale of new 10-year notes, which saw good demand despite a dismal turnout for the three-year note sale Tuesday.
On the New York Stock Exchange, advancing issues outnumbered declines by 5 to 3. Trading volume came to 237.63 million shares, up from 200.15 million Tuesday.
Among the market highlights:
* Computer-chip stocks led a major rally in high-tech issues, after an industry-wide barometer of chip orders showed continued improvement in January. National Semiconductor surged 7/8 to 10 3/4, Intel rocketed 2 1/2 to 68, Motorola rose 1 1/4 to 81 3/8 and Texas Instruments leaped 3 to 38.
* Applied Materials, an equipment supplier to chip firms, jumped 6 3/4 to 45 1/2 after it reported strong first-quarter earnings.
* Many insurance stocks soared after Aetna’s chairman forecast lower losses from problem real estate. Aetna rose 2 1/2 to 46 1/4, CIGNA gained 2 3/8 to 55 1/4, Chubb was up 1 1/8 to 68 5/8 and USF&G; rose 1/2 to 10.
* Casino stocks led entertainment stocks higher. Mirage jumped 1 to 30 7/8, Circus Circus leaped 2 1/2 to 44 3/4 and Caesars added 5/8 to 36.
* Among popular NASDAQ issues, haircut chain SuperCuts rocketed 3 5/8 to 24 1/2, rocket-fuel maker American Pacific soared 4 1/4 to 35 1/2, and MCI Communications jumped 1 5/8 to 34 7/8.
Biotech stocks also rebounded, helping the NASDAQ rally. Amgen rose 3 1/8 to 68 1/8, and Immunex added 3 1/2 to 58 1/4.
* Among the losers, hospital firm National Medical Enterprises eased 5/8 to 15 1/2. A First Boston analyst cut third-quarter earnings estimates to 34 cents from 39 cents, citing weakness in the psychiatric hospital business.
* Road-construction firm Granite Construction plunged 7 to 25 1/2. It reported disappointing fourth-quarter profit and said 1992 business remained uncertain.
Overseas, Tokyo issues fell again. The Nikkei average lost 277.88 points to 21,541.64.
London shares also lost ground. The Financial Times 100-share average fell 13.4 points to 2,523.7. In Frankfurt, the DAX average slipped 4.63 points to 1,678.92.
Credit
Bond yields rose slightly in quiet trading as the Treasury’s auction of 10-year notes went about as expected.
The price of the Treasury’s 30-year bond fell 9/32 point, or about $2.81 per $1,000. Its yield rose to 7.80% from 7.78% Tuesday.
Many bond traders continue to believe that interest rates will head lower soon, but the timing is uncertain, analysts said.
The federal funds rate, the rate on overnight loans between banks, rose to 3.81% from 3.76% Tuesday.
Currency
The dollar was mostly higher amid concern about possible unrest in the former Soviet Union.
Analysts said traders were at least temporarily shifting their focus from the U.S. economy to the political future of Russia and its sister states.
Former Soviet Foreign Minister Eduard Shevardnadze said a coup was possible because of the unrest in Russia and other republics.
Political unrest overseas is a “buy” sign for dollar traders. The U.S. currency is seen as a relatively safe investment during international strife.
The dollar rose in New York to 1.607 German marks from 1.597 Tuesday, though it slipped to 127.40 Japanese yen from 127.55.
Commodities
Wheat futures fell sharply on the Chicago Board of Trade, extending a drop that analysts said might finish a seven-month rally.
Wheat for March plunged 15 cents to $4.25 a bushel.
Late Tuesday, the Agriculture Department allocated $400 million in credit guarantees to the former Soviet republics to buy wheat, grains and other feedstuffs. Analysts said the figures were about what was expected. But speculators had pushed up wheat prices in recent weeks and took profits after the program was announced.
Meanwhile, gold and silver partially sustained the strong early gains they posted in reaction to a rumor that Russian President Boris Yeltsin had been ousted. Near-term gold rose $1.80 on the Comex in New York, closing at $358.10 an ounce. Silver picked up 3.2 cents to close at $4.21.
Market Roundup, D8
