Dow Quietly Near High on Seasonal Buying
Stocks advanced in a sedate session Thursday, leaving the Dow Jones industrial average just shy of its all-time high, as some investors added the market’s best performers to their portfolios ahead of year’s end.
The Dow closed up 23.83 points at 6,546.68, just 1.11 points below its record closing high of 6,547.79 on Nov. 25.
The Dow gained as much as 40 points in morning trading but then fell back in afternoon.
Traders said the day’s net gain was typical of year-end activity. “We’re right in the midst of the traditional folkloric Santa Claus rally,” said Robert Stovall of Stovall/Twenty-First Advisers.
“Even though everybody feels somewhat nervous about the [market’s high] level, it doesn’t seem to run into any selling at all,” said Tom Gallagher, senior stock trader at Oppenheimer & Co.
In the broad market, advancing issues outnumbered losers by nearly 2 to 1 on the New York Stock Exchange in very slow post-holiday trading. The NYSE composite rose 2.07 points to 397.07, nearing its all-time high of 398.86.
The Nasdaq composite index of mostly smaller stocks also advanced, rising 6.94 points to 1,294.57. But winners and losers were nearly evenly matched on the Nasdaq market.
Meanwhile, the bond market provided a calm backdrop for stocks as yields ended little changed.
Among Thursday’s highlights:
* Phone stocks jumped after federal regulators on Tuesday moved to allow local phone carriers to keep levying access charges on long-distance providers for the time being. Among the Baby Bells, SBC Communications surged 1 3/8 to 53 5/8, BellSouth added 1 to 40 7/8 and Bell Atlantic climbed 1 3/8 to 65.
* Long-distance giant AT&T; also gained, up 1 5/8 to 43, on news reports that its new president is shaking up the company.
* Technology shares helped boost the broad market. Linear Technology jumped 2 to 44 1/2, Motorola soared 3 to 63 3/8 and Netscape rose 2 7/8 to 55 7/8.
But Computer Associates eased 1/8 to 61 3/4. After the market closed, the software giant said current-quarter revenue will be as much as 17% below estimates because of poor European sales. But the company said it still expects to meet average earnings estimates.
* Airlines were strong. AMR, parent of American, surged 1 3/8 to 89 1/8, Continental jumped 1 1/8 to 27 and Delta gained 1 3/8 to 72 3/4.
* GE rose 1 1/4 to 103 1/4 after saying it was not in talks to buy American Express, which slumped 2 3/4 to 56 7/8.
* Among Southland issues, Eldorado Bancorp jumped 1 7/8 to 22 1/4 after the Orange County bank agreed to be taken over by private Commerce Security Bancorp at 23 a share.
Separately, mutual fund giant Franklin Mutual reported that it owns 5.4% of Anaheim-based SC Bancorp and that it believes the bank should be sold, citing “mediocre” performance. SC Bancorp shares did not trade Thursday.
Elsewhere, Tokyo’s Nikkei-225 index tumbled 1.3% on renewed worries about Japan’s soft economy and about the U.S. dollar’s advance to a 3 1/2-year high of 114.66 yen. In early trading, the Nikkei fell below 19,000 for the first time since December 1995, though it recovered to end down 257.83 points at 19,291.58.
