Dow Rises to Fifth Record in Week
Major stock indexes rose decisively Tuesday, climbing to records as new data indicated a slowing economy and raised the odds of a Federal Reserve move to ease interest rates.
The Dow Jones industrial average rose 76.23 points to close at 5,381.21, its fifth record close in the past seven trading days.
“This is one dynamite tape. Too many people think it’ll end and it’s not sustainable. My advice? Sit back, get long and enjoy it,” said James Cramer, president of Cramer & Co.
In the broader market, advancing issues swamped declines.
Advancing issues outnumbered decliners by nearly 2 to 1 on the NYSE in heavy volume that totaled 464.7 million shares.
The NYSE composite rose 3.08 to 337.28, and the S&P; 500 rose 5.93 to 630.15, both records.
The technology-heavy Nasdaq composite index rose 8.79 to 1,051.30 as most key issues in that economically sensitive sector continued to regain ground lost in December and early January.
At the American Stock Exchange, the market value index rose 3.30 to 550.96.
Tuesday morning, the Commerce Department reported that retail sales edged up 0.3% in December in a lackluster holiday shopping season. Many analysts had expected a 0.6% increase.
In addition, a private research group reported that consumer confidence sank in January to its lowest level in nearly two years with more people anticipating a tougher job market.
Treasury bond yields fell on the the news, indicating investors think the weakness will prompt the Fed to cut interest rates today.
Yields on benchmark 30-year Treasury bonds dropped to 6.03% from 6.09% Monday.
Among market highlights:
* Shares of economic bellwethers Union Carbide, Alcoa and GM paced the Dow industrials’ advance. GM jumped 1 1/2 to 53 3/4 after it said fourth-quarter earnings rose to $1.98, beating analysts’ average estimate of $1.34. Earnings were helped by a lower tax rate, which tumbled to 11% from 32.5% a year ago.
Union Carbide soared 3 to 42 3/4 and Alcoa jumped 2 1/4 to 56 1/4. Eastman Kodak. shares rose 1 3/4 to 72 7/8 after an analyst at Salomon Brothers Inc. told investors to buy shares of the company.
* Among companies that reported earnings, shares of Wm. Wrigley Jr. surged 2 1/8 to reach a record 57 1/4 after posting a 34% increase in profits.
Ben & Jerry’s Homemade, an ice cream company, jumped 1 5/8 to 15 1/2, and Estee Lauder, a cosmetics company, rose 3 1/4 to 37 after both companies beat Wall Street estimates.
MCI Communications said its net income jumped 17% last quarter as it registered the most traffic over its long-distance network in four years. The shares closed unchanged after rising 1 3/4 Monday.
Green Tree Financial, a lender for consumer purchases of manufactured homes and boats, posted fourth-quarter earnings of 50 cents a share, up from a year-earlier 34 cents and forecasts of 45 cents. Its shares rose 1/4 to 28 7/8. The stock soared 23% in the last two weeks.
* Drug shares extended Monday’s gain amid expectations the companies will continue to post robust profits this year. Eli Lilly, maker of anti-depression drug Prozac, rose 2 1/4 to 55 7/8 after announcing a 15% increase in fourth-quarter net income.
* Sun Microsystems gained 1 7/16 to 45 11/16. Reuters reported that merger talks between Sun and Apple Computers collapsed because they couldn’t agree on Apple’s price. Apple skidded 11 13/16 to 27 5/16.
Overseas, Tokyo’s Nikkei stock average rose 0.6%, Frankfurt’s DAX index fell 0.4% and London’s FT-SE 100 finished almost unchanged.
