FINANCIAL MARKETS : Stocks Climb Again as Dollar Extends Rally
Stocks pushed further into record territory Friday and handed Wall Street its 10th straight winning week, helped by a stronger dollar and investor demand for economically sensitive shares.
The Dow Jones industrial average added 19.37 points to close at 4,430.56, hitting a record for the fifth straight day. For the week, it was up 87.16 points.
In the broader market, advancing issues led decliners on the New York Stock Exchange by 1,231 to 990, with 358.27 million shares changing hands, down slightly from 371.63 million on Thursday.
The NYSE’s composite index, the Standard & Poor’s 500-stock index and the Nasdaq composite index also set new highs.
Some investors took profits in multinational consumer growth stocks that might be hurt by a stronger dollar, instead buying industrial issues that could benefit from a longer economic expansion.
The dollar extended its rally for the fourth straight day, hitting a 10-week-high against the German mark, as speculation grew that the United States will act to cut its bulging budget and trade deficits.
The greenback closed in New York at 1.448 marks, up from 1.432. It was also changing hands at 86.70 Japanese yen, up from 85.65 on Thursday.
Stocks dipped early in the session after the Labor Department said consumer prices rose a disturbing 0.4% in April. That exceeded economists’ expectations and came one day after the department reported a surprising 0.5% jump in wholesale prices.
The data caused bond investors to worry that inflation may be on the rise. The Treasury’s main 30-year bond yield edged up to 6.99% from 6.98% on Thursday.
Among Friday’s highlights:
* Investors bought the issues of economically sensitive companies on the hope that this week’s economic data heralds a soft landing for the economy. Auto stocks, for example, surged. Ford Motor rose 1 to 28 1/2, General Motors rose 1 3/8 to 46 5/8 and Chrysler added 3/4 to 43 5/8.
* Caterpillar shot up 3 7/8 points to 62 7/8 after the construction and farm equipment maker received a $22-million order for generator sets from an Australian company.
* International Paper rose 2 7/8 to 81 3/4, while Alcoa, another cyclical stock, added 2 1/8 to 46 7/8.
Eli Lilly lost 1 5/8 to 71 1/4, Abbott Labs fell 2 1/8 to 38 3/8, Pfizer fell 3 1/4 to 82, Johnson & Johnson lost 2 3/4 to 64 3/4, Coca-Cola lost 1 7/8 to 59, Procter & Gamble fell 1 3/8 to 69 3/8 and Philip Morris shed 1 1/4 to 70 1/4.
* Among retailers, Wal-Mart gained 7/8 to 25 1/4 and Limited rose 3/4 to 22 3/4. Home Depot added 1 3/4 to 44 1/2. Toys R Us, which is scheduled to report its earnings Monday, rose 1 1/4 to 27 1/8.
Novell climbed 5/8 to 21 1/8 on speculation that it is in talks to acquire Borland International. Borland rose 1 to 9 7/8.
* Advanced Micro Devices fell 1 3/8 to 35 3/4. Merrill downgraded the stock and cut its earnings estimates.
Overseas stocks were mixed, rising in Frankfurt and Mexico City but falling in Tokyo and London.
