FINANCIAL MARKETS : Dow Gains 14.52, Passing 4,500 Barrier
Blue-chip stocks closed above 4,500 for the first time Friday as the “triple witching” options expirations helped send the market to its third straight record close.
After rising to 4,517.02 earlier in the day, the Dow Jones industrial average ended 14.52 points higher at a record 4,510.79, surpassing Thursday’s record of 4,496.27. That capped a week of gains that boosted the Dow nearly 87 points.
Big Board volume was heavy at 448.27 million shares, the highest this year and the sixth-heaviest reading ever. On Thursday, 335.96 million shares changed hands.
But in a sign that investors may not have a lot of conviction, advancing issues barely edged out decliners on the New York Stock Exchange.
While blue-chip issues outperformed broader market indexes, all of them topped record highs set the previous day.
The NYSE’s composite index rose 1.20 points to 289.96. The Standard & Poor’s 500-stock index rose 2.71 points to 539.83. The Nasdaq composite index rose 5.97 point to 908.65, and the American Stock Exchange market value index rose 0.68 point to 495.40.
Traders attributed most of the gains, and the heavy volume, to Friday’s triple expiration of options and futures contracts.
The so-called triple witching expiration, which occurs every three months, can lead to wide price swings that have no link to the market’s overall direction.
Stocks got early support from University of Michigan data showing a rise in the consumer sentiment index for June to 92.3, compared to a predicted 89.6, from 89.8 in May.
Treasury bond yields rose slightly in a quiet finish to a volatile week, amid more conflicting suggestions about the timing of a possible interest rate cut by the Federal Reserve Board.
One factor splitting opinions was the surprising jump in consumer confidence last month and the seemingly conflicting comments by top Fed officials.
The Michigan report seemed to dampen the likelihood of an easing at the Fed’s next policy-setting meeting July 5.
The benchmark 30-year bond yield edged up to 6.62% from 6.61% on Thursday. Its price, which moves inversely to yield, dropped 5/32 point, or $1.56 per $1,000 in face value.
Among Friday’s highlights:
* Technology issues showed impressive strength, as they often have recently. Microsoft rose 2 1/8 to 87 after a federal appeals court upheld the Justice Department’s antitrust settlement with the software giant.
* Cable television stocks rose strongly due to rate deregulation measures in the telecommunications reform bill passed Thursday by the Senate. Clear Channel rose 4 5/8 to 69, Infinity Broadcasting rose 2 1/8 to 36 5/8, Capital Cities/ABC rose 3 1/4 to 106, McGraw-Hill rose 1 7/8 to 77 1/8, Time Warner added 1 1/2 to 40 5/8 and Comcast was up 13/16 to 18 5/8.
* Banking stocks, which usually fall when investors believe rates will rise, were mostly lower. Bankers Trust fell 1 to 61, J.P. Morgan slipped 1/4 to 71 and Citicorp lost 1/2 to 55 7/8.
* Home Depot fell 1 3/4 to 40 5/8 in heavy trading after Bear Stearns and Prudential Securities cut their second-quarter earnings estimates for the company, citing a downturn in housing starts tied to weak consumer spending.
* Caremark International rose 1 7/8 to 21 7/8. The health care company agreed to plead guilty in a federal kickback investigation and pay about $159 million in civil damages and criminal fines, according to a published report.
Overseas markets were mixed. Mexican stocks rose for a fifth day, with the Bolsa index closing up 45.73 points to 2,041.89.
Stocks closed lower in Frankfurt, Tokyo and London.
Market Roundup, D3
