Dow Gains 78 to Record; Bonds Unchanged
Stocks rallied for the second straight session Monday, pushing the Dow Jones industrial average to its 14th record of the year. Bonds were little changed.
The Dow Jones industrial average gained 78.50 points to close at 7,079.39, beating the previous record of 7,067.46 set Feb. 18. On Friday, the Dow added 56 points.
Other broad-market indexes gained as well.
Companies with strong brand names and oil producers led the way, and the market got a boost from news of the latest surge of cash into mutual funds, investors and analysts said.
“It looks like the big boys are back buying the big stocks,” said Alan Ackerman, market strategist at Fahnestock & Co.
There was little economic data to move the markets. A key inflation indicator will be released later this week with a report on producer prices.
There also seemed to be little concern about whether the Federal Reserve Board will tighten interest rates at its policy-setting meeting later this month.
The central bank’s Federal Open Market Committee meets March 25, but economists increasingly suggest that, with no overt signs of inflation in the economy, the committee probably won’t raise rates.
Higher rates could curb corporate profits and hurt stock prices.
The yield on the benchmark 30-year Treasury bond was unchanged from Friday at 6.81%.
In a departure from recent stock market sessions, investors seemed to be sifting through the technology sector, looking for bargains created by the group’s recent sell-off.
The Nasdaq composite index, heavily weighted with technology stocks, rose 10.92 points to 1,322.72, a smaller percentage gain than that posted by the Dow and one that kept it well below its record of 1,388.06 set Jan. 22.
On the New York Stock Exchange, advancing issues outnumbered decliners by a margin of nearly 2 to 1.
The NYSE composite index rose 3.87 points to 427.70, besting the Feb. 18 record of 427.07. The Standard & Poor’s 500-stock index gained 8.68 points to 813.65. The Russell 2,000 index of small-capitalization stocks rose 1.63 points to 367.09.
Among Monday’s highlights:
* Large-capitalization tech issues were among the strongest gainers. Microsoft was up 3 1/4 to 100. Compaq gained 2 5/8 to 79. Texas Instruments was up 1 3/8 to 85 1/4.
Even Cisco Systems finished strongly, up 2 to 53 3/8, after starting lower on a downgrade from PaineWebber. Not all computer-related stocks rallied. Electronic Arts dropped 2 5/16 to 29 3/16 after an analyst’s downgrade.
* Recent weakness among drug issues afforded a buying opportunity. Merck gained 2 3/8 to 95 3/8. Warner-Lambert rose 5 to 88 1/2, while Pfizer gained 2 3/4 to 96 7/8.
* Health-care products companies gained after a study said some commonly used pain medications appear to reduce the risk of developing Alzheimer’s disease. American Home Products, the maker of Advil, rose 7/8 to 67 5/8, and Bristol-Myers Squibb, which makes Nuprin, climbed 1 1/8 to 67 7/8.
* Oil refiners and equipment makers also rallied. Although this is traditionally a season of weaker prices as the market shifts from heating fuels to gasoline, crude oil remains above $20 a barrel.
Amoco gained 1 1/4 to 88 7/8, Royal Dutch Petroleum rallied 2 3/8 to 179 5/8 and Chevron gained 1 1/4 to 67 3/8. Oil field equipment maker Halliburton rose 1 3/8 to 69 3/8.
* H.J. Heinz rose 1/8 to 43 7/8 amid speculation that the maker of catsup and Budget Gourmet dinners will sell businesses, close plants, write off assets and cut as many as 2,000 jobs as part of a restructuring.
* In its first day on the Nasdaq bulletin board, Diana fell 1/2 to 4 1/2 after failing to move to the Nasdaq Stock Market while the exchange studies the company’s performance.
Overseas, London’s FTSE-100 rose 17.1 points to a record 4,437.4. Tokyo’s Nikkei-225 average lost 84.85 points to 18,113.89.
