Stocks rose as interest rates sank Friday, capping one of the best months ever for the Dow Jones industrials and lifting the Nasdaq market to another high in an abbreviated day-after-Thanksgiving session.
The Dow Jones industrial average rose 22.36 points to 6,521.70, bringing November’s stunning advance to 492.32, or nearly 8.2%. The point-gain easily beat the Dow’s previous one-month record of 319 in November 1995, but in the percentage-gain was far short of the 40.2% advance the Dow logged in April 1933.
The Nasdaq composite index notched its fifth straight record close, rising 5.29 points to 1,292.61, as bellwether computer-related shares continued to lead the market.
Once again, stocks took their cue from bonds, which rallied after two reports that reinforced the widespread notion of a moderating economy that may keep inflation under control without an increase in interest rates by the Federal Reserve Board. Bonds yields also fell on the continued strength of the dollar, which has made U.S. securities more attractive for foreign investors who convert their profits to other currencies. The 30-year Treasury bond--a key determinant of corporate and consumer borrowing costs--fell to 6.35%.
The Friday reports showed a small increase in personal consumption spending and no change in personal income growth.
“The reports more or less confirm that the economy certainly has slowed to a somewhat modest pace, but it certainly hasn’t stopped,” said Hugh Johnson, chief investment officer at First Albany Corp. “The numbers seem to suggest that there’s enough confidence among consumers that they’re willing to spend. That suggests that the holiday season is likely to be good.”
Among market highlights:
* Helping push the Nasdaq index to a record were Intel, which added 1/4 to 126 7/8 and Microsoft, up 1 3/8 to 156 7/8.
* Among other technology stocks, U.S. Robotics rose 4 1/2 to 78 in heavy trading. The maker of computer modems said its products will be included in Dell Computer’s Dimension line of personal computers early next year. Dell rose 1 5/8 to 101 5/8.
* Unisys shares were the most active on the NYSE, jumping 1 1/8 to 7 5/8 after a published report that the computer mainframe maker might post a profit in 1997.
* Retail shares gained, possibly buoyed by initial signs of strong holiday sales. J.C. Penney rose 5/8 to 53 3/4, Sears Roebuck gained 5/8 to 49 5/8, and Federated Department Stores rose 3/8 to 34 1/4.
* Hilton Hotels shares rose 3/8 to 29 1/4 after the hotel and casino company said it received approval from the New Jersey Casino Control Commission to acquire Bally Entertainment Corp. for $3 billion. Bally rose 3/8 to 29 1/8.
Overseas, Tokyo’s Nikkei stock average fell 0.1%, Frankfurt’s DAX index rose 1.0%, and London’s FTSE-100 rose 0.2%.
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Hot and Cold Stocks: 4-Week Trend
Here are the stocks that have risen the most and fallen the most over the last four weeks through Friday. The four-week trend can be a good indicator of stocks that have strong momentum.
(Please see newspaper for chart)