The Dow Jones industrial average charged into record ground for the third time this week on Thursday as blue-chip stocks celebrated the good news that inflation was still not a threat to the economy.
The Dow index jumped 76.19 points to 6,625.67. It briefly climbed more than 100 points in late afternoon before backtracking on profit taking.
Broader market measures flirted with new highs, but most came up slightly short. The Russell 2000 list of smaller companies, which has lagged the blue-chip sector's rebound from last summer's steep sell-off, edged to its first record high since May 22.
Stocks got a boost from the December producer price index, which confirmed that inflation remained in check at the wholesale level.
The report triggered a sharp rebound in the bond market, lifting the benchmark 30-year Treasury more than a full point, lowering its yield 6.76% from 6.84% on Wednesday.
Overall, wholesale prices rose 0.5% in December, the Labor Department reported. While the increase was more than economists had generally forecast, most of the rise was attributable to higher energy prices.
The so-called core rate, which excludes volatile food and energy prices, edged up only 0.1%, which was in line with analysts' forecasts.
Investors were also apparently able to overcome the caution that generally creeps in ahead of the closely watched monthly employment and wage report, which is due today.
Advancing issues outnumbered decliners by a 12-7 margin on the New York Stock Exchange.
The NYSE Composite index of all listed common stocks rose 3.33 to 398.58. The average share was up 35 cents.
The Russell 2000 rose 1.42 to 365.59, beating its previous best close at 364.61, set May 22.
Among Thursday's highlights:
* Oil-related shares led the Dow parade. Exxon rose 3 3/8 to 102 7/8, Texaco jumped 3 to 105, DuPont rose 2 5/8 to 104 1/2 and Chevron gained 1 5/8 to 68 3/8.
* The Dow also drew a boost from IBM, up 2 to 161 7/8, and Alcoa, which rose 2 1/4 to 69 5/8.
* Slowing retail sales prompted warnings from some apparel stores that profits would be below expectations. Limited fell 7/8 to 16 7/8; Federated Department Stores fell 3/8 to 31 3/4; and Neiman-Marcus Group slid 3 3/8 to 23 3/8.
But in anticipation of higher earnings, Borders Group gained 2 1/8 to 36 7/8, and Kmart rose 3/8 to 10 7/8.
* Tobacco shares regained much of their morning losses as investors expressed skepticism about damage from negotiations by Brooke Group Ltd.'s Liggett cigarette unit to settle state lawsuits.
Philip Morris rose 5/8 to 113 3/8; Loews, owner of Lorillard, gained 1/4 at 94; and Brooke gained 1/8 to 5.
* American Airlines parent AMR lost 1 1/2 at 86 5/8 after the airlines' pilots union rejected a tentative labor contract, forcing the company to put a multibillion-dollar order for Boeing jets on hold. Boeing lost 1/8 to 105.
Overseas, stock prices in Tokyo dipped below a key level in early trading, with the 225-issue Nikkei falling 78.26 points, or 0.43%, to 17,995.61 points in the first 30 minutes of trading. On Thursday, the average lost 606.51 points, or 3.25%.
Market Roundup, D6