Dow Ends Record-Breaking Streak; Tech Stocks Advance
Wall Street finished mixed Monday as modest profit taking ended a wild six-session run by blue-chip issues, while technology stocks rebounded.
Meanwhile, bond yields fell for a third straight session, and the dollar dropped again.
The Dow Jones industrial average slipped 9.95 points to 7,772.09 from Friday’s record close of 7,782.04. The index had surged 477 points, or 6.5%, in the previous six sessions, bringing its year-to-date gain to a stunning 20.5%.
“Even God rested on the seventh day,” said Charles White, managing director at Avatar Associates.
Yet in the broad market Monday, many stocks continued to advance. Losers had only a narrow edge over winners on the New York Stock Exchange, and several key indexes, including the Standard & Poor’s 500 and the Russell 2,000, edged up to new highs.
“Investors are a little nervous with a market that’s gone up so much so fast,” said Arthur Stockton, chief executive of Stockton Trust, which oversees about $1 billion of assets. Still, “who can argue with the fundamentals of low interest rates and inflation?”
The market was stoked last week by more signs that the U.S. economy is slowing, while inflation remains subdued. The evidence now is widely expected to keep the Federal Reserve Board from raising interest rates when it meets July 1-2.
Indeed, bond yields fell further Monday, with the 30-year Treasury bond ending at 6.69%, down from 6.72% on Friday and the lowest since Feb. 25. Shorter-term yields also declined.
The government today will report on May consumer price inflation. If the report is benign, it could spark another bond rally, some analysts said.
“We continue to see nothing but good news” for bonds, said Ben Mayer, who manages $1.3 billion in bonds at AMR Investments in Fort Worth.
Among Monday’s highlights:
* Some consumer-growth stocks that had led the Dow higher last week were hit by profit taking. Losers included American Express, down 1 3/8 to 75 1/4; 3M, down 1 to 97 3/4; and Procter & Gamble, off 1 3/8 to 141 1/2. Other blue-chip issues losing ground included Gillette, down 2 to 96 5/8, and Warner Lambert, down 2 to 108 1/2.
* But technology issues, weak late last week, saw fresh buying. Compaq gained 4 7/8 to 105 1/8, Cadence Design jumped 2 1/4 to 32 1/8, Intel added 2 1/2 to 147 1/4, America Online gained 2 1/2 to 61 and Texas Instruments surged 3 1/4 to 87 3/4.
Also, Micron Technology rose 1 3/4 to 42 1/2. After the market closed, the chip maker reported better-than-expected quarterly earnings of 44 cents a share, up 66% from a year ago.
* Energy stocks also showed strength, with Mobil up 2 3/8 to 143 5/8 and Schlumberger gaining 3 to 122.
In currency trading, the dollar fell to 113.52 Japanese yen from 114.89 on Friday on renewed concerns about Japan’s growing trade surpluses. The German mark also rose against the dollar, as European Union leaders resolved a dispute between France and Germany, putting the plan for a single currency back on track.
Market Roundup, D12
