U.S. stock prices reached record highs again Monday, buoyed by the prospect that the economy will hum along at a steady pace and interest rates will stay stable.
Stock and bond markets virtually ignored another new low in the dollar made in Asian trading.
The Dow Jones industrial average gained 10.03 points to end at 4,083.68, its third straight record closing high.
Also, the Standard & Poor's 500 index eked out a gain of 0.63 point to 496.15, its third consecutive record. The Nasdaq composite index of mostly smaller stocks rose 2.16 points to 810.49, topping its previous peak of 809.34 set Thursday.
Still, analysts noted that the broad market looked less impressive than the indexes' records would suggest. Declining issues edged advancers 1,086 to 1,054 on the New York Stock Exchange.
"It's a very cautious-type environment," said Paul Hennessey, trader at Boston Co.
The market has been in a generally bullish mode since late December on growing evidence that the economy is slowing to a more moderate pace. That has helped push bond yields lower after last year's surge in interest rates.
"The market is saying we're going to extend this economic cycle out," said Gil Knight, research director at First National Maryland, which manages $3 billion in stocks. Investors expect corporate profits to continue to grow, underpinning stock prices.
Meanwhile, the bond market was fairly stable Monday, with shorter-term Treasury yields virtually unchanged and the 30-year Treasury bond yield inching up to 7.39% from 7.37% on Friday.
Bonds' rally of recent weeks has tailed off in the last few trading sessions. Investors may be waiting for Friday's government report on February orders for durable goods to provide new evidence of the economy's slowdown.
Elsewhere, the dollar rebounded from a record low against the Japanese yen in Asia after Japan's central bank intervened early Monday.
The dollar hit a new post-World War II low of 88.75 yen in Asian trading, but rallied back to close at 89.31 in New York, up from 89.10 on Friday.
Traders said many Japanese companies are continuing to repatriate dollar assets in an effort to improve their finances for the end of Japan's fiscal year March 31. That has pushed the dollar down sharply in recent weeks.
Against European currencies, however, the dollar got some relief Monday. It closed at 1.403 German marks in New York, up from 1.386 on Friday.
The dollar was helped as Hans Tietmeyer, the president of Germany's powerful central bank, called the U.S. currency's recent decline exaggerated. He said Europe wanted to see a stronger and stable dollar, which, he noted, remains the world's main reserve currency.
"As the Bundesbank goes, so goes the dollar," said one currency trader. Tietmeyer "was indicating that the currency markets were stretching the tolerated trading ranges. The market has a great deal of respect for the German central bank. A lot of profit taking came in on those comments."
Among U.S. market highlights:
* Philip Morris accounted for a major part of the gain in the Dow. It soared 2 7/8 to 66 5/8 on reports that an appellate court's ruling on a hemophiliacs' class action could help the tobacco industry in pending litigation, traders said.
Among other tobacco firms, RJR Nabisco headed the NYSE list of active issues. It gained 1/8 to 5 13/16; American Brands slipped 1/8 to 37 3/8.
* Some other consumer-related blue chips also were strong. The stocks have led the market this year. Gillette gained 1 1/8 to 83 7/8, Warner-Lambert surged 1 3/8 to 79 3/4 and Sears was up 1 1/8 to 52 3/8.
* Airline stocks jumped after UAL, parent of United Airlines, said it expects lower costs to contribute to improved results for 1995.
UAL shot up 5 to 95, Northwest Air leaped 1 3/8 to 24 3/4, American Airlines parent AMR jumped 1 1/4 to 62 3/4 and Alaska Airlines added 1 to 14 3/4.
* On the down side, steel stocks fell after Nucor announced some price cuts. The industry has recently been trying to pass through renewed price hikes. Nucor lost 2 1/8 to 51 3/4, USX-U.S. Steel fell 1 3/8 to 30 3/4 and Inland Steel gave up 1 1/4 to 24 3/4.
* Utility stocks also were weak. The Dow utility index fell 1.45 points to 186.07. Some analysts consider weakness in utilities an early warning of an upward turn in interest rates.
* Circus Circus climbed 3 5/8 to 28 7/8 in response to news that the company is buying Gold Strike Resorts for 17 million shares and $12 million in cash.
* AutoFinance Group surged 5 3/16 to 15 3/16 on the Nasdaq market after it was announced that the financing company will be acquired by KeyCorp.
* Medtronic said it received Food and Drug Administration clearance to market its Jewel implantable defibrillator, a device for correcting rapid heartbeat. Its shares gained 2 3/8 to 70.
Among foreign markets, London's FTSE-100 index jumped 34.9 points to 3,124.20, and Frankfurt's DAX index lost 13.49 points to 1,991.75.
In Mexico City, the Bolsa index sank 22.92 points to 1,581.24.
In U.S. commodities trading, cotton dropped sharply, adding to Friday's limit fall of 2 cents per pound, as traders anticipated prices encouraging farmers to plant more cotton.