Blue Chips Reach Another Record; Oil at 4-Year Low
The Dow Jones industrial average edged up to a fifth consecutive record high Tuesday, but stocks overall closed mixed amid more saber-rattling between the United States and Iraq.
Elsewhere, oil prices fell to near four-year lows despite U.S.-Iraq jitters. Bonds rallied on soft economic data. Silver prices slumped.
On Wall Street, the Dow gained 28.40 points to a record 8,398.50, though it pulled back from a peak of 8,446 reached early in the day.
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. The Dow now is up 6.2% year-to-date.
But buyers were less interested in smaller issues Tuesday. While winners topped losers by 16 to 15 on the New York Stock Exchange, losers had a 22-20 edge on Nasdaq.
The Nasdaq composite index lost 6.99 points to 1,703.43; the Russell 2,000 index of smaller stocks fell 1.10 points to 453.19.
Tuesday was “really a consolidation day,” said Charles Blood, analyst at Brown Bros. Harriman & Co. “Last week was a pretty good week, and we had carry-over strength from the start.”
Stocks initially were lifted by gains in earlier trading overseas and by a rally in bonds, as interest rates fell. Bonds were responding to a weaker-than-expected report on industrial production: 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 economists said the figure largely reflected a milder-than-usual winter that reduced output by electric and gas utilities.
Still, the Asian economic crisis “is not over yet and the economic effects are ahead of us,” which could spell lower interest rates, said Garth Nisbet, who manages $750 million of bonds at Crabbe Huson Group in Portland, Ore.
On Tuesday, the yield on the bellwether 30-year Treasury bond fell to 5.79% from 5.84% on Friday. The yield now is the lowest since mid-January.
In commodities trading, near-term crude oil futures tumbled 36 cents to $15.66 a barrel in New York after dipping as low as $15.52--the lowest price for crude since the week of April 15, 1994.
Analysts said oil’s price reflects many traders’ bet that the U.S.-Iraq standoff will end without a military confrontation.
Meanwhile, silver fell more than 4% to $6.77 an ounce in New York, its biggest decline in seven months, as low supplies were replenished by producers and investors who sold the metal at prices close to a 9 1/2-year high.
Among Tuesday’s highlights:
* The Dow’s big gainers included Boeing, up $2.13 to $52.50; Merck, up $2.19 to $119.88; and Disney, up $1.56 to a record $113.
* Auto parts firm Echlin rocketed $11 to $49.88 on news that rival SPX launched a hostile takeover offer worth $48 a share in cash and stock. Traders are betting on a higher bid. SPX fell 81 cents to $74.25.
* 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.
* Casino stocks were broadly lower on worries that continuing airline flight cutbacks to Las Vegas will hurt hotel and casino occupancy rates in the gambling capital. Circus Circus fell $1.19 to $22.69.
Overseas, European markets shot higher, with London’s FTSE-100 stock index gaining 1.6%. Most Asian stock markets were also higher, despite new worries about Indonesia.
Market Roundup, D12
