Dow Achieves New High; Yields Rise
Stock indexes managed to finish higher Wednesday, with the Dow Jones industrial average hitting a new all-time high at the end of an indecisive session dampened by lower bond prices and concern about the economy and first-quarter earnings.
The 30-stock average rose 18.06 points to close at 5,689.74, overcoming a 30-point deficit early in the session. The index’s previous record was 5,683.60, set March 18.
The blue-chip index took a big boost for a second day from IBM, which was up 2 1/8 at 119 3/4, accounting for nearly half the average’s gain. It was followed by Philip Morris, up 1 3/4 at 92 1/8, representing another 5.42 points in the Dow.
Blue chips languished for most of the day until the final 75 minutes of trading, when the Dow moved into positive territory even as bond prices continued lower on news of two strong readings on the economy.
But declining issues outnumbered advancers by 8 to 7 on the New York Stock Exchange, where volume was moderate at 386.54 million shares as of 4 p.m., down from Tuesday’s pace.
Broad-market indexes also rose. The NYSE composite index rose 0.21 point to 351.81, the Standard & Poor’s 500-stock index rose 0.62 point to 655.88 and the Nasdaq composite index rose 4.56 to 1,115.85.
Many investors have been on the sidelines because of or in anticipation of religious holidays this week, the March jobs report scheduled for Friday and a step-up in earnings reports expected next week. Passover began at sundown Wednesday; markets are closed Friday because of Good Friday.
The yield of the Treasury’s main 30-year bond rose to 6.62% on Wednesday after the government reported that consumer spending and personal incomes rebounded strongly in February, recovering from January’s snow storms.
Consumer spending--which accounts for two-thirds of the nation’s economic activity--shot up 1.1% after falling 0.4% in January, the Commerce Department said.
Another report said factory orders fell 1.4% in February. Excluding the volatile transportation sector, however, orders edged up 0.2%, the third straight advance.
The personal income and spending data were stronger than expected “and set the stage for stronger growth in the second quarter and beyond,” said Joseph Liro, analyst for CIBC Wood Gundy.
Among market highlights:
* IBM’s gains carried few on its coattails. Cray Research, another maker of big computers, fell 4 1/4 to 24 3/4, after Silicon Graphics completed its tender offer for Cray. Software maker Oracle lost 1 1/2 to 45 1/2 amid continued concern about soft sales of personal computers.
* The shares of casino companies again drew strong buying on reports that ITT and Hilton Hotels are shopping for gaming companies to expand their operation. Both companies declined comment. Bally Entertainment rose 1/8 to 21 3/4 after rising 3 5/8 on Tuesday on rumors that ITT and Bally were in high-level talks. Showboat jumped 2 5/8 to 29 7/8 and Harrah’s Entertainment added 3 to 32 1/2.
Grain prices soared with corn closing at a record high in a flurry of commodity fund buying driven by the tightest supplies in two decades. At the Chicago Board of Trade, May corn surged 10 cents to $4.24 1/4 a bushel, surpassing the record closing high of $4.19 1/4 set Nov. 28, 1980.
