FINANCIAL MARKETS : Dow Continues Its March, Up 20 to 4,989
Blue-chip stocks’ never-say-die bull market pushed ahead on Friday, with the Dow Jones industrials closing just below 5,000.
Despite a continuing mixed performance by technology issues, the market advanced as buyers picked up oil, entertainment and transportation stocks, among others.
The Dow added 20.59 points to a record 4,989.95, and other major market indexes also rose modestly. The Standard & Poor’s 500-index crossed 600 for the first time, up 2.73 points to a record 600.07.
Trading Friday was influenced by the regular monthly expiration of certain stock option and index contracts. As traders roll-over or close out bets made using those contracts and individual stocks, prices can be particularly volatile.
“On an options expiration you never know what will happen,” said Harry Laubscher, analyst at Tucker Anthony in New York.
Options-related trading was believed to have helped boost the Dow 50.94 points on Wednesday and 46.61 points on Thursday.
But analysts also said the market’s resilience owes itself to underlying investor optimism that interest rates can fall further and that the economy will maintain a moderate growth track in 1996.
Assuming that scenario, “There is a perceived demand by most . . . investors that they have to stay fully invested” in stocks, said Eric Miller, market strategist at Donaldson, Lufkin & Jenrette Securities in New York. “They can’t build cash, and if they sell something, they have to buy something else.”
What’s more, the current budget battle between President Clinton and the Republican-dominated Congress is widely seen in a positive light because it demonstrates Republicans’ insistence on balancing the budget, analysts say.
Bonds reflected that view this week: The 30-year Treasury bond yield ended at 6.23% on Friday, down from 6.33% a week ago and up just slightly from Thursday’s 22-month low of 6.22%.
On Wall Street stocks began climbing early in the session Friday and added steadily to their gains all day. The Dow got as high as the 4,996 during trading.
In the broad market rising stocks outnumbered losers by 1,368 to 931 on the Big Board in heavy trading.
The only major disappointment for the bulls this week: Key technology issues--which had led the market for much of this year--now are stumbling. Weakness in some tech shares on Friday held the Nasdaq composite index to a 0.55-point gain, to 1,045.03. It remains below its record high of 1,067.40.
Among Friday’s highlights:
* Cold weather in much of the country drove oil and natural gas prices up, and that boosted oil stocks in the Dow index. Chevron rose 7/8 to 50 1/8, Exxon gained 1 1/2 to 79 3/8 and Texaco jumped 1 1/8 to 71.
* Time Warner surged 1 3/8 to 39 3/4 after announcing a reshuffling of top personnel. Also gaining in the entertainment sector were Walt Disney, up 1 1/2 to 59 1/4, and Gaylord Entertainment, up 7/8 to 25 1/4.
* Transportation stocks were strong. Conrail gained 1 3/8 to 69 7/8, Delta Air Lines added 1 to 70 1/4 and Federal Express leaped 1 3/4 to 79 1/2.
* Buyers also returned to some industrial names, including Fluor, up 3 1/4 to 59; Monsanto, up 2 to 112 1/4,; and Furon, up 3/4 to 18 1/8.
* On the down side, Hewlett-Packard sank 4 3/4 to 88 1/2 after its quarterly earnings report disappointed investors. Other tech shares losing further ground included Intel, off 1/8 to 62 3/4; Microsoft, off 2 1/2 to 87 3/8, and 3Com, down 1 3/8 to 45 1/4.
* Investors continued to give a rousing reception to new stock issues. Cosmetics firm Estee Lauder zoomed to 34 1/2, up 8 1/2 from its initial offering price of 26 on Thursday. Also making its debut Friday was Canadian National Railway, which jumped to 15 from an initial price of 12 on the NYSE.
In Mexico City the Bolsa stock index surged 86.98 points to 2,349.46 as the peso rebounded, raising hopes that its latest slump has ended. U.S.-traded Mexican stocks also were up sharply.