Investors Just Won’t Quit as Dow Nears Peak
Investors seem to want to refuse to close the books on 1998--not before making another run at a record high for the Dow Jones industrials, anyway.
The Dow led the broad market higher Tuesday, gaining 94.23 points, or 1%, to 9,320.98, a finish that left the blue-chip index just 54 points from its peak of 9,374.27 set Nov. 23.
The Dow now has risen for eight straight sessions--its longest winning streak since 1996.
Meanwhile, in Tokyo early today, the Nikkei-225 stock index ended its final trading session of 1998 at 13,842.17--leaving it down 9.3% for the year, the third straight annual decline.
Things couldn’t be more different on Wall Street, where the Standard & Poor’s 500-stock index on Tuesday easily eclipsed its peak set last week, gaining 1.3% to a record 1,241.81. Its year-to-date rise: nearly 28%.
And despite modest profit-taking in many Internet names, the Nasdaq composite eked out a record high as well, adding 1.47 points to 2,181.77.
Small-stock indexes also gained, though they lagged blue chips, with the S&P; SmallCap index rising 0.7%.
Winners topped losers by a healthy 18 to 13 on the New York Stock Exchange, but had only a 21-19 edge on Nasdaq.
Low trading volume between the Christmas and New Year’s holidays is helping exaggerate some stocks’ gains, analysts say, as market liquidity overall is thinner.
Still, investors on Tuesday seemed to be positioning themselves for 1999, buying many blue-chip favorites that have led the market this year. Drug stocks, for example, were hot. So were telephone stocks. Both groups have outperformed the market in ’98.
“It’s a normal seasonal phenomenon: Companies that come into December with strength continue that strength,” said Robert Streed, a portfolio manager for Northern Trust Co., which manages $200 billion in Chicago.
Retailers’ stocks also came alive Tuesday. “The whole tone of the economy right now remains robust and ebullient,” said Ned Riley, investment chief at BankBoston, which oversees $26 billion. “As long as it appears that the consumer is willing to spend, [retail] stocks will do particularly well.”
In other trading, bond yields continued to slide amid unexpectedly strong demand at the Treasury’s sale of new two-year notes. The notes’ yield was 4.69%. The 30-year T-bond yield, meanwhile, dropped to 5.10% from 5.15% on Monday.
Among Tuesday’s highlights:
* In the drug sector, Merck surged $3.06 to $151.06, Pfizer leaped $5.19 to $124.63 and Lilly gained $2.88 to $90.13.
* Phone stocks advancing included Bell Atlantic, up $1.44 to $59.75; MCI WorldCom, up $2.31 to $74.25; and GTE, up $1.56 to $70.81.
Major phone stocks are being viewed as “safer” Internet plays.
* In the Net sector itself, sellers dominated after Monday’s run-up. Amazon.com fell $19.63 to $332.31, Lycos lost $4.38 to $57.31 and Onsale fell $5 to $51.50.
But online brokerage National Discount Brokers rocketed $17.50 to $31.50 after reporting sharply higher earnings.
* Although Net commerce has been the focus in recent days, some investors returned to traditional retailers amid signs that holiday store sales were better than expected.
Wal-Mart jumped $2.06 to $81.94, Dayton Hudson rose $2.69 to $52.50, Gap leaped $5.13 to $60.69 and Guess soared $2.88 to $7.13.
Market Roundup, C7
