Financial Markets : Dow Sets New High on Sharp Rise in IBM : Market Overview
* Stocks sensitive to the economic cycles pushed the Dow Jones average to another record high Monday, but the broader market ended mixed.
* The Treasury market ended mixed in sleepy, pre-holiday trading, with the long bond’s yield rising moderately.
Stocks
The blue-chip indicator rose 23.76 points to 3,764.43, eclipsing its previous mark of 3,740.67 set Friday. Last week the Dow set three all-time highs.
A steep rise in the shares of Dow component IBM boosted the blue-chip index. IBM, the most active issue on the NYSE, was up 2 1/8 at 57 3/8 after it agreed to sell its Federal Systems unit to Loral. for $1.58 billion in cash.
Stocks rallied late in the session as computer-driven program trading hit the market, analysts said. Stocks moving higher were mostly in the so-called “cyclical” area, such as chemicals, papers and mining.
In the broader market, however, declining issues narrowly outnumbered advances on the New York Stock Exchange. Big Board volume totaled 256.58 million shares, up from Friday’s 245.62 million in the previous session.
Analysts said solid economic data released recently has improved investor sentiment about the economy. In addition, many are optimistic the ongoing world trade talks will reach a successful conclusion. A trade agreement could help exports and that in turn would boost the domestic economy.
For much of the day, the market drifted, depressed by the rising interest rates that came with lower bond prices. And with no major economic or other news, there was little else to provide direction, analysts said.
Higher interest rates are often viewed negatively by stock investors because they increase the cost of money to corporations and make stocks less attractive.
Meanwhile, stocks ended mixed abroad. In Frankfurt, the 30-share DAX average closed at 2,172.50, up 11.62 points, while Tokyo’s 225-share Nikkei average finished up 67.90 points at 17,327.33. In London, the Financial Times 100-share average ended 6.7 points off at 3,254.6.
Among the market highlights:
* Minnesota Mining & Manufacturing rose 2 7/8 to 110 7/8 and Aluminum Company of America, which rose 1 1/4 to 73 5/8.
* Procyte lost 4 5/8 to 10 7/8 on the Nasdaq stock market. The company said the Food and Drug Administration has directed Procyte to place clinical studies of a new drug on hold pending a review by the FDA.
* Shares of precious metals companies rose, rallying with the price of gold. On the NYSE, American Barrick rose 1/2 to 28 3/8; Homestake Mining rose 7/8 to 22 5/8; ASA rose 5/8 to 49 7/8, and Newmont Gold rose 1 to 47 1/8.
Other Markets
In the bond market, the Treasury’s main 30-year bond yield rose to 6.23% from 6.20%, pushing its price down 11/32 point, or $3.44 per $1,000 in face value. Yields and prices move in opposite directions.
Analysts gave little import to the price change, which was magnified in thin trading. With no significant economic news to guide investors, the market settled into typical pre-holiday doldrums.
Meanwhile, crude oil and other energy futures fell sharply on the New York Merc, erasing previous gains. January light sweet crude oil fell 55 cents to $14.52 a barrel.
Prices were pressured in part by news that Saudi Arabia, the biggest oil producer in OPEC, opposed cutting production.
Elsewhere, the dollar settled higher against most major currencies as dealers used the Russian elections as an excuse to trade in an otherwise dull market.
Market Roundup, D10
