Blue Chips Reach Another Record; Oil at 4-Year Low
Blue-chip stocks closed at a fifth consecutive record high Tuesday, and bonds and the dollar rose as investors flocked to the relative safety of U.S. financial markets in anticipation of a military attack on Iraq.
Crude oil prices fell to their lowest levels in nearly four years as the possibility of a war between Iraq and U.S.-led forces hung in the balance.
The Dow Jones industrial average ended with a gain of 28.40 points at 8,398.50 after breaking the 8,400 level for the first time, early in the session.
The five-session string of new highs follows a six-month drought of records for Wall Street’s best-known indicator, and it is the longest streak since a six-session string in June.
With Tuesday’s gain, the Dow is now up 818 points since Jan. 9, when it sank to 7,580.42. The blue-chip index, which dropped 4% over the first six trading days of 1998, is up 6.2% for the year.
Broad-market indexes were mixed, but the New York Stock Exchange composite also set a record, rising 1.51 points to 532.79.
The Standard & Poor’s 500-stock list rose 2.67 points to 1,022.76, and the technology-heavy Nasdaq composite index lost 6.99 points to 1,703.43 as the high-tech sector attracted profit-taking following recent strong gains.
Among small-company indexes, the Russell 2,000 fell 1.10 points to 453.19.
Tuesday’s “really a consolidation day,” said Charles Blood, senior financial markets analyst at Brown Bros. Harriman & Co. “Last week was a pretty good week, and we had carry-over strength from the start.”
Advancing issues outnumbered decliners by a 9-8 margin on the New York Stock Exchange, where volume totaled 598.06 million shares, compared with 531.03 million Friday. Markets were closed Monday for Presidents Day.
Stocks initially were lifted by gains in earlier trading overseas and by a weaker-than-expected report on industrial production, the latest sign that inflation is under wraps. The Federal Reserve Board reported flat output at the nation’s factories, mines and utilities last month.
It was the first time industrial production has failed to record a monthly increase since October 1996. But rather than being a sign of economic problems, the figures reflect a milder-than-usual winter that reduced output by electric and gas utilities.
In the inflation-sensitive bond market, the yield on the benchmark 30-year Treasury bond fell to 5.79% from 5.84% on Friday.
Among Tuesday’s highlights:
* The Dow’s big gainers included Boeing, up $2.13 to $52.50; Merck, up $2.50 to $120.19; and AMR, up $3.69 to $134.75.
* Beneficial, the nation’s third-largest consumer finance firm, shot up $30.63 to $112.88 after it said it is considering putting itself up for sale. In a letter to investors, it said it hired Goldman Sachs and Merrill Lynch to help boost its stock by considering a sale, a merger or focusing on its current strategy of jettisoning less profitable units.
In currency trading, the dollar rose to 126.65 Japanese yen from 125.20 yen when trade wrapped up early Friday for Monday’s holiday.
Oil prices dropped as President Clinton said the military force he has ordered to the Persian Gulf was poised to strike Iraq if diplomacy failed to open up suspected chemical or biological weapons sites from which Baghdad has barred U.N. inspectors.
Crude oil for March delivery at the New York Mercantile Exchange closed 36 cents lower at $15.66 a barrel after dipping as low as $15.52, the lowest price for crude since the week of April 15, 1994.
Overseas, London’s FTSE-100 closed up 1.59%. In Tokyo, the 225-share Nikkei average closed up 0.09%.
Market Roundup, D12
