FINANCIAL MARKETS : Stock Indexes Hit Highs; Bond Yields Rise
Another batch of strong earnings reports helped push major stock indexes to record highs Thursday, for the second time this week.
But bond yields rose in advance of today’s report on first-quarter gross domestic product growth.
The Dow Jones industrial average rose 14.87 points to a new high of 4,314.70, surpassing Monday’s record of 4,303.98.
Small-company stocks, led by technology issues for the third consecutive session, outperformed blue-chip issues for most of the day. The Nasdaq composite index reached a new milestone, gaining 4.04 points to a record 840.95.
In the broader market, advancing issues edged out decliners by 1,133 to 1,096 on the New York Stock Exchange in active trading.
After its biggest one-day gain against the Japanese yen in 20 months on Wednesday, the dollar eased to close at 83.70 yen in New York, down from 83.78. It also changed hands at 1.378 German marks, up from 1.368 the day before.
Some traders were happy with the dollar’s solid stance after this week’s meeting of major industrial country finance ministers. The ministers pledged no new steps to aid the weak dollar, but they suggested they are resolved to avoid a further decline.
The only weak spot in Thursday’s markets was the bond market. Yields rose as many dealers stayed on the sidelines ahead of the Commerce Department’s report on gross domestic product.
With recent economic reports suggesting the economy may not be as weak as thought, some traders will be watching intently to see if first-quarter GDP growth is stronger than expected. That could rekindle worries of higher interest rates.
Thurday, the yield on the 30-year Treasury bond rose to 7.33% from 7.32% on Wednesday, but shorter-term yields were up more sharply.
Among the market highlights:
* IBM rose 1 5/8 to 96 7/8, extending this week’s gains on earnings optimism. Computer chip maker Cirrus Logic rocketed 8 1/4 to 49 3/8 after it added to recent strong earnings reports with its own bullish figures Thursday.
* Oracle Systems jumped 2 1/4 to 31 1/4 after the company announced a joint marketing project with Cray Research, which rose 3/4 to 20. Among other tech issues, Intel climbed 1 to 101 5/8, Dell added 1 3/4 to 54 3/4 and Adobe Systems advanced 1 1/4 to 56 1/2.
* Airline issues put in another strong day, also following encouraging earnings reports released earlier this week. Delta climbed 2 5/8 to 64 5/8 and United Airlines parent UAL rose 1 3/8 at 119 3/4.
* On the downside, Coastal Healthcare Group sank 6 to 15 3/8 after reporting first-quarter results that were well below expectations.
Meanwhile, Mexico’s peso plunged amid concerns about Telmex’s first-quarter earnings and Mexican economic growth, analysts and traders said.
The peso fell in value as much as 6.2%, to 6.175 per dollar, from Wednesday’s closing price of 5.795 pesos. It ended at about 5.90.
Foreign markets were mixed, with Tokyo’s 225-share Nikkei average gaining 57.50 points to close at 16,883.99. In Frankfurt, the 30-share DAX average closed down 3.45 points at 2,026.08, while London’s FTSE-100 average fell 8.6 points to end at 3,217.6.
