FINANCIAL MARKETS : Dow at High on Corporate, Dollar Gains
Stocks posted strong gains on Thursday, as robust corporate earnings and a rising dollar propelled the Dow Jones industrial average to a new high.
The dollar also gained ground on hopes the big industrial countries of the world will come up with a credible plan to support the greenback next week.
Treasury bond yields closed with a modest decline.
The Dow Jones industrial average closed up 23.17 points at 4,230.66, eclipsing the previous record of 4,208.18 reached on April 13.
International Business Machines reported record earnings of $1.3 billion in the first quarter of 1995, capping a turnaround engineered by Chairman Louis Gerstner, who joined the company two years ago. “It’s a total blowout,” said one trader of the strong earnings.
IBM closed up 1 3/4 at 88 7/8 on the Big Board.
Sears, Roebuck & Co. said its first-quarter net income rose to $559 million in the quarter, compared with a loss of $98 million a year earlier. The results were stronger than Wall Street expected, and Sears stock rose 7/8 to 53.
Traders were able to focus on the strong earnings as the falling dollar regained some lost ground.
Traders, buying the currency before the Group of Seven meeting of industrial nations next week, think it could be an opportunity to coordinate a rescue attempt for the flagging greenback.
The dollar climbed to as high as 1.3900 German marks, but by late New York trading, it was at 1.3855 marks, up from 1.3705 marks late Wednesday.
It was also higher at 83.25 yen, compared with 81.25 yen in New York late Wednesday.
Due to months of volatile exchange rates, many dealers expect the Group of Seven nations to at least express a desire for stable market conditions.
But German Chancellor Helmut Kohl said in a television interview Thursday that Washington should do more to rescue the dollar and called its policies unacceptable. He made the remarks on German ARD television.
Mexico’s currency powered through a key threshold of six new pesos per dollar Thursday, in the strongest evidence yet that the government’s peso rescue efforts are bearing fruit.
In the broader stock market, advancing issues led declines by 1,157 to 1,017 in heavy trading of more than 365 million shares on the New York Stock Exchange. Standard & Poor’s 500-stock index rose 0.37 to 505.29. The Nasdaq composite index rose 2.46 to 819.01.
Chrysler fell 1 3/4 to 44 1/2 amid growing pessimism about Kerk Kerkorian’s $55-a-share takeover bid for the auto maker.
Compaq Computer surged 3 5/8 to 35 3/4 as the personal-computer maker reported flat first-quarter net per-share earnings.
Health maintenance organization stocks came under fire for the second day amid concern that rising claims will eat into profits. United Wisconsin Services, which helped spark the selloff with a profit warning on Tuesday, sank 15 1/4 to 20 3/8. It did not trade Wednesday due to an imbalance. U.S. Healthcare Inc. fell 3 15/16 to 29 5/16. Oxford Health Plans lost 3 5/8 to 43.
Oil stocks moved higher as oil prices rose and some companies reported strong earnings. Schlumberger rose 3 5/8 to 63 1/2. Texaco climbed 1 1/2 to 67 7/8; Chevron rose 1 7/8 to 86 1/2, and Exxon climbed 1 1/4 to 69 3/4.
In overseas stock markets, London’s FTSE 100 index of leading shares ended up 4.6 points at 3174.7. In Tokyo, the key 225-share Nikkei average closed up 266.98 points, or 1.63%, at 16,643.06.
Meanwhile, the yield on the benchmark 30-year Treasury bond fell to 7.35% from 7.36% Wednesday.
On the New York Mercantile Exchange, May crude oil rose to an eight-month high of $20.82 a barrel, but later gave up some gains to end up 11 cents at $20.52.
Market Roundup, D6
