Economic Gains Lift Dow by 15 to Record Close
* Blue-chip stocks jumped to a record close in a late rally, leading the broad market higher. Industrial issues were in demand as investors bet on a strong economy, and oil stocks surged as oil’s price leaped.
* The seesaw in interest rates continued as Treasury bond yields moved up. Meanwhile, the dollar rallied against the yen.
Stocks
The Dow industrials powered higher in the final minutes to close up 14.92 points at 3,798.82, a new high that topped the old peak of 3,794.33 set Dec. 29.
The broad market followed the Dow, but most other stock indexes failed to set new highs.
In a sign of the heavy institutional interest in stocks, trading volume on the New York Stock Exchange rocketed to 400 million shares. Winning stocks topped losers by 12 to 10 on the NYSE and by 14 to 11 on Nasdaq.
Early January is typically the strongest period of the year for inflows of new cash to money managers, who then must turn around and invest, analysts said.
And with economic reports increasingly pointing to robust growth, many institutional investors now appear hungry for stocks of companies whose profits should rise with the economy’s fortunes.
The Commerce Department on Wednesday bolstered sentiment with news that factory orders in November rose 1.4%, a stronger than expected showing.
Among the market highlights:
* Industrial issues leading the market up included Alcoa, up 1 3/4 to 72 1/4; International Paper, up 2 3/4 to 72 3/8; Phelps Dodge, up 1 7/8 to 50 3/4; Monsanto, up 1 3/8 to 75 1/4; Georgia-Pacific, up 2 1/8 to 72 1/4, and Briggs & Stratton, up 1 1/4 to 83 3/8.
* Transportation issues, also sensitive to the economy, were strong. Railroad CSX surged 3 1/8 to 84, Conrail gained 1 1/8 to 66 3/8, Roadway added 1 1/2 to 62 1/4 and American Airlines parent AMR rose 1 3/8 to 68 3/4.
* Energy stocks moving up with oil’s rebound included Chevron, up 1 1/4 to 90 3/4; Arco, up 1 7/8 to 108 3/8; Phillips, up 1 to 30 3/4, and Enron Oil & Gas, up 2 1/2 to 41 5/8.
* Many technology issues rebounded sharply. Apple leaped 2 1/4 to 33 3/4, Digital Equipment gained 2 1/4 to 37, 3DO jumped 3 to 23 1/4, Texas Instruments rocketed 4 to 66, Lotus Development was up 3 to 57 and Newbridge Networks surged 3 1/4 to 60 3/4.
* Beaten-down gaming stocks were also hot. MGM Grand soared 2 3/8 to 37 1/8, Mirage added 1 1/4 to 24, International Game Technology jumped 2 7/8 to 31 3/4 and President Riverboat was up 2 to 24.
* On the downside, utilities weakened as interest rates moved up. American Electric Power lost 1/2 to 36 1/2, Con Ed fell 5/8 to 31 3/8, Houston Industries dropped 5/8 to 46 1/4 and SCEcorp eased 1/4 to 20 1/8.
In foreign markets, Mexico City’s Bolsa index skyrocketed 98.42 points, or 3.9%, to a record 2,657.31 as investors shook off worries about the peasant uprising near the country’s southern border.
Stocks also hit a record in Toronto, where the TSE-300 index shot up 32.54 points to 4,401.08.
Tokyo stocks also rallied strongly, with the Nikkei-225 index rising 413.74 points to 17,783.48.
But profit takers took markets lower in London, Frankfurt, Paris and Hong Kong.
Other Markets
Optimism about the economy and a surge in oil prices knocked the bond market for a loss--the sixth in eight sessions.
The yield on the Treasury’s 30-year bond jumped to 6.40% from Tuesday’s 6.34%. But shorter-term yields were up much less.
Analysts say many bond investors are nervous ahead of Friday’s scheduled government report on December employment--the first major statistic on the economy’s health last month.
Some bond investors are concerned that December job growth will come in above expectations, which could fan fears of brisker economic growth and thus hasten the day the Federal Reserve Board tightens credit.
In oil markets, light, sweet crude futures soared 67 cents to $15.34 a barrel on the New York Merc on speculation that OPEC will move up its planned March 25 meeting to deal with the world oil glut.
Elsewhere:
* The dollar finished at 112.90 Japanese yen in New York, up from 112.60 on Tuesday, as traders shrugged off comments by Treasury Secretary Lloyd Bentsen that appeared aimed at restraining the dollar’s recent rise against the yen. A weaker yen would help Japanese export growth.
* Profit takers dominated metals markets. Gold futures slumped $3 to $391.10 an ounce on the New York Comex, and silver futures slid 14.5 cents to $5.06 an ounce.
Market Roundup, D6
