FINANCIAL MARKETS : Dow Rallies to New High; Dollar Up Too
Recovering from a morning slump, stocks finished firmer Friday, pushing the Dow Jones industrial average to a record high for the third time this week.
The dollar also rose as dealers bet that the currency had reached the end of its months-long free fall for now. Bond yields also ended higher.
The Dow climbed out of a 31-point loss to close 6.57 points higher at 4,321.27, topping a record closing high of 4,314.70 set Thursday.
The broader market also advanced, with rising issues leading decliners by 1,173 to 1,035 on the New York Stock Exchange. Big Board volume was a hefty 322.96 million shares, down from 352.31 million on Thursday.
Three broad-market indexes also broke records set Thursday. The NYSE’s composite index added 0.44 point to 277.31. The Standard & Poor’s 500-stock index climbed 1.16 points to 514.71. The Nasdaq composite index advanced 3.03 points to 843.98.
Stocks declined early in the session as bond yields surged, after the Chicago Purchasing Management Assn. said its April index of area economic activity rose to 57.6 from 55 in March.
Investors said the Chicago numbers could foreshadow a surge in manufacturing activity nationwide.
The markets also reacted negatively to a Labor Department report that import prices jumped 0.6% in March.
But some investors were using the slightly negative economic news as an excuse to take profits in a market that has risen more than 600 Dow points since Thanksgiving.
Earlier, the Commerce Department said the economy expanded at a moderate 2.8% annual rate in the first quarter of the year. That was the weakest growth since the summer of 1993.
The dollar rallied against most key currencies Friday in thin, choppy trading. It hit a three-week high against the Japanese yen and a two-week high against the German mark.
By the close in New York, the dollar fetched 84.20 Japanese yen, up from 83.70 on Thursday and its highest level since April 6. The dollar was also changing hands at 1.387 marks, up from 1.378 on Thursday and the highest since April 13.
In the bond market, the Treasury’s key 30-year bond lost about half a point early in the session but recovered late in the day, closing down 3/32 point, or $0.94 per $1,000 in face value. The yield rose to 7.34% from 7.33% late Thursday. Price moves in the opposite direction from yield.
The Dow industrials were led higher by cyclical stocks, as hope built that the economy is still growing.
Among Friday’s highlights:
* Caterpillar led the pack, up 1 3/4 to 58 1/2, followed by International Paper, up 1 3/4 to 77, and General Motors, up 1 5/8 at 45 1/8.
* Procter & Gamble surged 1 5/8 to 69 7/8. The company said Thursday that its third-quarter net income rose to 88 cents a share from 66 cents a year ago.
* Chrysler gained 1 3/8 to 43 1/4. USA Today reported that the auto maker may raise its $1.60-a-share annual dividend as early as June, in response to a $22-billion takeover bid by Kirk Kerkorian.
* Intel rose 1 3/4 to 102 3/8 after the chip maker said Thursday that it was splitting its stock 2 for 1 and raising its quarterly dividend.
Overseas markets closed lower. Mexico’s Bolsa index fell 25.09 points to 1960.54.
Stock prices also fell in Tokyo, Frankfurt and London.
