Finance Stocks Power Dow Beyond 9,000
Lifted by the proposed marriage of financial giants Citicorp and Travelers Group, the Dow Jones industrial average Monday closed above 9,000 for the first time.
A little more than five months after tumbling below 7,000 amid fears that the bull market had run its course, the Dow not only pushed past 9,000 but briefly flirted with 9,100.
The Dow closed up 49.82 points at 9,033.23 in active trading, boosted by a jump in Travelers, one of the 30 stocks in the most widely watched index. On Friday, the Dow leaped above 9,000 only to settle back at the close, down 3.23 points at 8,983.41.
But were it not for the big advance by Travelers--up $11.31 to $73--and J.P. Morgan--the second financial-services issue on the Dow, which surged $10.81 to $144.75--the 30-stock average would have fallen 39 points.
The broader market ended mixed and declining issues outnumbered advancers by a 17-13 margin in heavy trading on the New York Stock Exchange.
The Nasdaq composite index fell 26.26 points to 1,829.14 and the Standard & Poor’s index of 500 stocks edged down 1.32 points to 1,121.38.
U.S. bond prices fell for the first time in a week as investors sought more signs that the national economy is slowing and as South Korea prepared to sell $3 billion of bonds this week in its first international debt sale.
The benchmark 30-year Treasury bond edged lower, pushing its yield up to 5.82% from Friday’s 5.79%..
The Dow surged more than 100 points in early trading as stunned investors responded to the proposed Citicorp-Travelers merger, which requires approval from regulators.
The deal would create the first global supermarket for banking, insurance and other financial products and prompted speculation that other banks and brokerages would merge.
“I think it has gotten people to think if these two can combine, almost anybody can combine,” said Alfred Kugel, senior investment strategist at SteinRoe & Farnham. “It refreshes the speculative juices.”
While it took more than 76 years for the Dow to gain its first 1,000 points, it took just 189 trading days to move from 8,000 to 9,000. That was the third-quickest move of its kind: It took just 89 trading days to climb from 6,000 to 7,000 and 110 days to move from 7,000 to 8,000.
Of course, at these elevated levels, it takes less lift to move 1,000 points. The last leap represented a gain of just 12.5% for the blue-chip average. It would take a rise of 11.1% to get to 10,000.
Still, it was an especially impressive performance considering the market turmoil of late October, as economic problems caused Asian financial markets to collapse, sending shock waves around the globe. The Dow plunged a record 554.26 points on Oct. 27 and fell even more at the open the next day before abruptly changing course.
Among Monday’s highlights:
* The day’s activities centered on securities and financial services firms, which surged on expectations that the Citicorp-Travelers merger would drive more combinations.
Merrill Lynch jumped $10.50 to a record $97, Lehman Brothers Holdings rose $6.19 to an all-time high of $80.81, PaineWebber Group rose $2.81 to a record $44.50, Morgan Stanley Dean Witter rose $4.56 to a high of $80 and American Express rallied $5.75 to $104.75.
* Semiconductor shares fell after National Semiconductor said it will be able to put all the parts of a personal computer on a single chip by mid-1999, a move that could send PC prices below $400 and challenge Intel’s dominance.
National Semi rose $3.44 to $23.69, while Intel fell $2.88 to $73.88, Linear Technology fell 94 cents to $69.94, Novellus Systems slid $1.06 to $44.56 and Lam Research slipped $1.38 to $29.94.
* Cable TV stocks rose after Microsoft co-founder Paul Allen announced plans to buy most of Dallas-based Marcus Cable for $2.78 billion in cash and debt. Tele-Communications Inc. rose 81 cents to $32.25 and US West Media Group rose 63 cents to $35.69.
* A profit warning from Edify, a maker of software that lets customers perform banking and other transactions by phone, cost it $6.88. The shares closed at $11.25.
Likewise, Robotic Vision Systems fell $3.56 to $9 after the maker of equipment that examines semiconductors for flaws said first-quarter results will be “significantly” below estimates.
Elsewhere, oil prices fell on worries over whether producers will carry out pledges to cut output. Crude oil for May delivery fell 54 cents to $15.45 a barrel on the New York Mercantile Exchange.
In currency markets, the dollar ended lower after last week’s powerful rally. The currency fetched 1.8405 German marks late in New York, down from 1.8485 late Friday, and 134.80 Japanese yen, down from 135.25.
Overseas, British stocks hit their fourth straight record, with London’s FTSE-100 up .69%. Tokyo’s Nikkei average rose .23%.
