Dow Hits Record 3,353 as Industrial Stocks Soar

Blue chip stocks jumped to a record close for a second consecutive day on Wednesday, buoyed by improving corporate earnings and a new rush into heavy-industry stocks.

The Dow Jones industrial average rocketed 47.63 points, or 1.4%, to a new high of 3,353.76. The Dow had risen 36.23 points Tuesday to its first close above 3,300.

Investors reacted enthusiastically to the latest batch of first-quarter earnings reports, which included surprisingly strong results from some industrial giants. The earnings gains offered a powerful sign that the recession is over, bringing many recently nervous investors back to stocks.

Philadelphia-based chemical firm Rohm & Haas, for example, said its earnings surged 44% in the first quarter from a year ago as sales rose. The stock jumped 4 7/8 to 53 5/8 on the New York Stock Exchange.

Also, Superior Industries, a Van Nuys-based auto-parts maker, soared 4 5/8 to 54 1/8 after reporting earnings up 211%.

Other companies reporting strong quarterly earnings included Motorola, Conrail and CBS Inc.

“There’s been a change in sentiment--we’ve gone from bearish to bullish in only a week,” said Alan Ackerman, analyst at Reich & Co. brokerage in New York. The Dow has added 172 points in five sessions.

Strength in industrial stocks indicates that “money is moving away from uncertainty . . . on the expectation that the economy will continue to grow over the next few quarters,” Ackerman said.

Advancing issues outnumbered decliners 12 to 7 on the NYSE, as trading volume came to 228.38 million shares, down slightly from 230.62 million Tuesday.

Broader stock indexes also advanced, but not at the Dow’s pace, and none of them hit new records. The Standard & Poor’s 500 index added 3.89 points, or 0.9%, to 416.28; the NASDAQ composite index of smaller stocks rose 5.22 points, or 0.9%, to 600.03.

Some analysts attributed the size of Wednesday’s Dow jump to today’s expiration of stock-index futures and options. The expiration, which often results in market volatility, is a day earlier than normal because of Good Friday. The stock market will be closed on Friday.

Sentiment also may have been helped by continuing stability in the Japanese stock market, after stunning losses in recent weeks. The Nikkei index of the Tokyo stock exchange leaped 508.43 points Wednesday, and by midday today was up 54.40 points to 18,002.41.

European markets also were robust. In London, the Financial Times-100 index jumped 39.7 points to 2,640.2. In Frankfurt, the DAX index rose 11.26 points to 1,743.79.

Among U.S. market highlights:

* Industrial stocks leading the Dow higher included Alcoa, up 2 7/8 to 74 5/8; Goodyear, up 4 to 75 3/8; International Paper, up 3 7/8 to 76 1/4, and 3M Co., up 1 3/8 to 93 1/8.

Also, heavy-machinery maker Caterpillar, another Dow stock, gained 4 3/8 to 53 7/8. The UAW agreed to end its 5-month-old strike against the company while contract talks continue. Deere, which has had labor problems of its own, rose 1 3/4 to 50 7/8.

* Chemical stocks helped by Rohm & Haas’ earnings report included Monsanto, up 2 1/2 to 66 1/2; Dow Chemical, up 1 to 62 1/4, and Ethyl, up 1 1/8 to 27 5/8.

* Conrail led railroad stocks higher, up 5 1/2 to 90 1/2 on its earnings. Other gainers included Norfolk Southern, up 2 3/4 to 64 5/8, and Union Pacific, up 1 3/8 to 50.

* Among tech stocks, Motorola’s earnings report fueled a 6-point jump in its shares, to 82. Other tech winners included Computer Sciences, up 3 5/8 to 68 1/8, and Texas Instruments, up 1 1/2 to 35 1/4.

Also, Microsoft soared 11 7/8 to 128 7/8, and Hewlett-Packard rose 2 1/2 to 82 3/8. A federal judge dismissed much of Apple Computer’s $5.5-billion copyright suit against Microsoft and HP. Apple added 1 3/4 to 60 1/2 nonetheless.

* While industrial stocks were the day’s stars, the losers once again were many of the biotech, health care and food stocks that began to tumble early this year.

Another bomb hit the biotech group Wednesday when Wall Street learned that the FDA probably won’t approve Centocor’s drug for treating septic shock any time soon. Centocor shares plummeted 12 3/4 to 18 1/2. Xoma, which has developed a similar drug, lost 4 to 14 1/2. Most other biotech stocks also plunged.

The news also hurt major drug stocks. Merck sank 4 to 151 1/4, Johnson & Johnson lost 1 3/4 to 100 1/2, American Home Products fell 1 5/8 to 80, and Schering-Plough sank 2 to 56 1/4.

Commodities

What was good for stocks was terrible for gold: June gold futures fell $3.50 to $336 an ounce on the New York Commodity Exchange, the lowest level since 1986.

Silver also plummeted, as the May contract fell 9.5 cents to $4.01 an ounce. Two big fund sellers in Chicago reportedly helped beat down silver.

Precious metals prices sank as the rebound in stock prices dashed the hopes of bearish traders, who had hoped that Tokyo’s recent problems would lead to a worldwide market plunge, forcing panicked investors into metals.

Meanwhile, oil prices firmed, buoyed by fear of a possible embargo on Libyan petroleum. May contracts for light, sweet crude closed at $19.87 a barrel, up 1 cent, on the New York Merc.

Elsewhere, cocoa and coffee futures prices closed near all-time lows on the New York Coffee, Sugar & Cocoa Exchange as supply gluts continued to depress prices.

Currency

The dollar continued a run-up against the German mark and most other key currencies.

It rose to 1.662 marks in New York from 1.653, and to 133.38 Japanese yen, up from 133.00.

Economic figures from Washington supported belief in a strengthening U.S. economy. Production at the nation’s factories, mines and utilities rose 0.2% in March, after a 0.5% advance in February.

Currency trading volume was moderate and is expected to become increasingly sluggish ahead of the Good Friday holiday. European financial markets will be closed Friday and Monday, which will curb currency dealings here.

Credit

Bond yields rose slightly in extremely quiet trading.

The Treasury’s 30-year bond fell 1/8 point, or $1.25 per $1,000. Its yield rose to 7.87% from 7.86% Tuesday.

Steven A. Wood, economist at BankAmerica Capital Markets Group in San Francisco, attributed the light volume to the short Good Friday trading week and the closure early in the week of the Chicago futures markets because of flooding.

Analysts also said traders sold positions to take advantage of a rise in bond prices since the Federal Reserve pushed down interest rates last week. Lower interest rates usually boost bond prices.

The federal funds rate was 4%, up from 3 1/4% Tuesday.

Market Roundup, D8

Blue Chip Surge Favorable corporate earnings reports helped the stock market to another record close Wednesday. open: 3,328.26 close: 3,353.76