Blue-chip stocks set their third record high this week on Thursday as the market received an unexpected boost from a powerful rally in the dollar after Germany's central bank cut interest rates.
The Dow industrial average ended 11.76 points higher at 4,172.56, posting the 13th all-time closing high this year.
Cyclical names were boosted by the higher dollar and further evidence that the economy is growing without inflation.
"Soft-landing" proponents got a boost from a Labor Department report that new claims for jobless benefits fell by 10,000 last week, suggesting the economy is expanding moderately.
But the gains in cyclical issues were curbed by a continued selloff in technology stocks, as investors moved to book profits in this high-flying sector before the first quarter ends.
In the broader market, advancing issues led decliners by about three to two on the New York Stock Exchange, where Big Board volume was a robust 362.96 million shares, down from 385.95 million on Wednesday.
Meanwhile, other widely followed market indexes were mostly lower. The NYSE's composite index fell 0.01 point to 271.83. The Standard & Poor's 500-stock index declined 0.91 point to 502.21, while the Nasdaq composite index, which is heavily weighted with technology issues, slid 2.30 points to 816.86.
But the American Stock Exchange's market value index rose 2.66 points to 465.01.
Stocks moved higher with the dollar at the opening bell, after the German Bundesbank, in a surprise move, lowered key short-term interest rates.
The lower rates attracted investors to the dollar and to dollar-denominated securities, including stocks.
But while the dollar stayed buoyant throughout the day, bond prices fell as precious metals prices surged. Concluding that the German interest-rate move was potentially inflationary, investors poured money into inflation-hedges such as silver and gold.
Silver futures prices soared about 10% Thursday to lead a precious metal rally triggered by the dollar's sudden strength.
The panicked buying drove silver prices above $5 for the first time in four months and focused attention on declining visible stocks of the metal.
On the New York Merc, silver for April delivery vaulted 46.3 cents to $5.219 an ounce, the highest daily settlement for near-term deliveries since Nov. 17. April gold rose $3.60 to $386.50.
Treasury bond yields ended higher Thursday as market participants, receiving no surprising economic news, moved to book profits before the quarter ends.
The benchmark 30-year bond yield closed Thursday at 7.41%, up from 7.37% on Wednesday. The long bonds price, which declines when yields rise, fell 7/16 point, or $4.38 per $1,000 in face value.
Among Thursday's highlights:
* Gold- and silver-mining stocks surged, with Placer Dome up 1 at 24 and Pegasus Gold up 1/2 to 12 1/4.
* The most-active lists were peppered with sharply lower computer issues. IBM, down 5/8 to 82 3/8; Micron Technology, off 4 to 74 1/2 and Texas Instruments, down 3 3/4 to 90 1/4. Intel was down 1 11/16 at 85 3/8; Cisco Systems off 1/2 at 36 3/4 and Tech Data, which fell 1 5/8 to 9 7/8.
* But cyclical names, those that respond sharply to changes in the economy, led the Dow 30 components higher, including Caterpillar, up 2 1/2 to 52 3/8; Alcoa, up 2 1/2 to 42 7/8; DuPont, up 1 1/8 to 61 and General Tire, up 1 to 37 1/8.
* Chrysler, another cyclical issue, topped the most-active list on the New York Stock Exchange for most of the day and rose 1 7/8 to 42 5/8. General Motors added 3/8 to 44 7/8, while Ford advanced 1 1/8 to 27 3/4.
* Paper companies rallied with other cyclical issues, as investors decided the economy could continue to grow at a steady but non-inflationary pace. Georgia Pacific rose 1 3/4 to 80 3/8; Stone Container rose 2 1/4 to 23 1/8; Champion International rose 2 1/4 to 43 1/8 and Bowater rose 2 5/8 to 37 5/8.
In overseas stock markets, the Bundesbank's easing didn't do much for German stocks. The 30-share DAX average ended down 0.42 point at 1,918.46.
Tokyo's 225-share Nikkei closed up 51.49 points at 16,512.22, while London's Financial Times 100-share average finished up 33.9 points at 3,176.2.
Meanwhile, in commodities trading, gasoline prices surged to their highest level in almost two years Thursday amid concern of a supply drop because of production problems at a large East Coast refinery.
Unleaded gasoline for delivery in April settled at 60.68 cents a gallon up 0.69 cent on the New York Merc.
In other trading, light sweet crude oil for delivery in May settled at $19.15 per barrel, down 7 cents.
* BUNDESBANK CUTS RATES
German central bank's move aids dollar, Europeans. A1