Market Hits New Highs as Dow Adds 90 to 9,167
The stock market on Friday shook off Thursday’s profit-taking and rallied again, with key indexes hitting record highs.
Despite news of a worsening trade deficit, and lower stock markets across Asia and Europe, the Dow Jones industrial average shot up 90.93 points, or 1%, to a record 9,167.50, in an advance that gained steam all day.
Friday’s Dow record eclipsed the previous high of 9,162.27 set Wednesday and left the blue-chip index up 1.9% for the week and 16% for the year.
The broad market went along for the ride Friday. Winners topped losers by 17 to 12 on the New York Stock Exchange and by 23 to 19 on Nasdaq.
The Standard & Poor’s 500 index jumped 1.3% to a record 1,122.72, in its biggest one-day gain in a month.
And the Nasdaq composite rose 8.36 points, or 0.5%, to a record 1,866.60 despite a sell-off in many of the week’s high-flying Internet-related stocks.
Stocks opened modestly lower after a second straight day of sharp declines in Tokyo and Europe.
The Nikkei-225 index fell 179.97 points, or 1.1%, to 15,703.80 as the dollar held on to its recent gains against the yen.
For the week the Nikkei lost 5% as investors overall remained pessimistic about a turn in the Japanese economy any time soon. That dragged the rest of Asia lower The South Korean market fell 3.8% for the week; the Hong Kong market lost 3%.
In Europe, where stocks have soared this year, the German market fell 1% on Friday and British shares were down 1.3%.
But on Wall Street the buying quickly resumed by midday, led by financial and drug issues.
Analysts said the flow of money into the U.S. market remains extraordinary. Many investors funded their individual retirement accounts at the tax deadline Wednesday, sending mutual funds another load of cash.
The bond market has helped support stocks’ ongoing rally, as yields remain stuck in a tight trading range. The 30-year Treasury bond yield ended unchanged at 5.87%--almost exactly its level a week earlier.
The trade deficit report Friday didn’t appear to shake up currency markets or the bond market, analysts noted--despite the implication that Asia’s economic woes are finally hitting U.S. shores.
With takeover mania still raging and with first-quarter corporate earnings reports looking fairly decent, many veteran Wall Streeters say they are at a loss to say what could finally halt the streaking stock market.
Among Friday’s highlights
* Leading the Dow’s advance was American Express, up $4.63 to $107 after reports that the company might merge with American International Group to compete with the financial services behemoth that would be created by the proposed merger of Citicorp and Travelers Group.
AIG gained $5.31 to $139.44.
Among other financial giants, J.P. Morgan rose $1.13 to $61.88, Wells Fargo gained $2.44 to $375.13 and Merrill Lynch jumped $2.81 to $94.81.
* Drug stocks rose after falling for seven of the last eight days. Eli Lilly rallied $5.13 to $68.38 on expectations that a new study will show that its Evista drug will help prevent cancer.
Pfizer, which is developing a similar drug, gained $4.50 to Johnson & Johnson added $2.56 to $72.56 and Alza jumped $5.44 to $48.50.
* The Dow’s other big gainers included Procter & Gamble, up $2.25 to $85.13, and Coca-Cola, up $2 to $16.81.
* On the downside, soaring Internet-related issues finally pulled back after Internet directory firm Excite reported a wider loss and warned it might not be able to sustain its growth. Excite plunged $15.81 to $75.31, Yahoo lost $6.89 to $121.50 and Infoseek lost $7.50 to $36.69.
But K-Tel International, which tripled this week amid excitement about its plan to sell music on the Internet, rocketed another $7.56 to $28.69.
* Stocks moving on earnings reports included FileNet, up $8.25 to $56.50; Caterpillar, up 56 cents to $56.75; Corning, up $1.25 to $40.75; and Premark, up $1.50 to $35.13.
* GenRad plunged $11.25 to $20.75 after the software company said first-quarter profit plunged on lower sales.
Among Latin American markets, Brazil’s key stock index inched up 0.2% to 12,109 after the central bank slashed the nation’s prime lending rate to 23.3% from 28%.
In U.S. trading, Telebras, the Brazilian phone giant, added 25 cents to $127.88.
Market Roundup, D4
