FINANCIAL MARKETS : Dow Surpasses 4,300 as Bond Yields Ease
Wall Street zoomed to new highs Monday, keying off Friday’s big gains and strength in the dollar and bond markets.
Latin American stock markets were also broadly higher, with Mexico’s key share index reaching its highest level since mid-January as the peso rallied again.
The Dow Jones industrial average, which jumped 39.43 points on Friday, meandered for much of Monday before shooting higher in the final two hours. It closed up 33.89 points at 4,303.98, a record and the first close above 4,300.
Broader market indexes also joined the Dow at all-time highs, including the New York Stock Exchange composite, up 2.08 points at 276.84, and the Standard & Poor’s 500, up 4.40 points at 512.89.
Also, the Wilshire market value index of virtually all U.S. stocks closed above the $5-trillion mark for the first time, adding 33.46 points to 5,013.97.
As has been typical in this year’s U.S. stock rally, the major indexes reached record highs without the benefit of a true buying frenzy. Rising stocks topped losers by about 14 to 9 on the NYSE, hardly the 3-1 or 4-1 ratios that market “technicians” expect to see in bull markets.
Also, NYSE volume was a relatively modest 326 million shares.
Analysts noted that investors have continued to gravitate toward classic growth stocks and technology stocks as many of those companies have reported surprisingly robust first-quarter earnings--belying the weakening economy.
“Earnings increases from large corporations have been impressive, and it looks like it’s going to continue,” said Gil Knight, analyst at First National of Maryland.
Stocks also got a lift Monday as long-term bond yields edged down to their lowest levels since last summer. The 30-year Treasury bond yield slipped to 7.30%, down from 7.33% on Friday and the lowest since June.
A mild rally in the battered dollar may have helped attract new buyers to bonds. The dollar gained ahead of today’s meeting of industrial nations’ finance chiefs.
Meanwhile, Latin stock markets powered higher as the Mexican peso closed at 5.84 to the dollar, its best level in two months. Analysts cited increasing optimism that Mexico’s financial crisis is under control. In Mexico City, the Bolsa stock index surged 97.78 points, or 5.1%, to 2,017.20, its highest close since Jan. 31.
In Brazil, the Bovespa stock index jumped 3.8%; Argentina’s Merval index gained 2.8%.
Among U.S. market highlights:
* IBM led the market rally, still benefiting from last week’s stunning quarterly earnings report. The stock jumped 1 7/8 to 93 1/2. Leading tech stocks in general were up strongly, including Intel, up 3 5/8 to 96 1/2; Microsoft, up 2 3/4 to 77 3/4; Motorola, up 2 to 54 1/4; Texas Instruments, up 7 1/4 to 101, and Western Digital, up 1 1/8 to 16 1/8.
* Classic growth issues rising included Disney, up 1 to 55 3/4; Eli Lilly, up 1 1/4 to 76 1/8; Wrigley, up 1 1/2 to 46 1/8; Gillette, up 1/2 to 82 1/2, and Anheuser-Busch, up 1 1/2 to 59 5/8.
* Some industrial names also drew buyers. Monsanto jumped 2 1/4 to 83 7/8, Lockheed Martin surged 3 to 59, Emerson Electric added 1 1/2 to 66 1/2 and Deere was up 1 1/4 to 85 1/8.
* Among Southland issues, software firm Quarterdeck surged 1 9/16 to 6 3/4 after posting a big quarterly profit. But restaurant chain IHOP tumbled 2 5/8 to 24 3/8 after brokerage Goldman Sachs downgraded the shares.
Overseas, Tokyo’s Nikkei-225 share index eased 164.19 points to 16,804.05, while Frankfurt’s DAX average was off 0.43 point to 1,976.21 and London’s FTSE-100 index added 9.4 points to 3,209.3.
