S&P; at Record, Dow Gains 38; Peso Hits Low
Blue-chip stocks rose modestly Friday, boosting some key indexes to record highs, as prices apparently grew too attractive after less than two days of profit-taking following a monthlong rally.
Meanwhile, the Mexican peso hit a record low against the dollar on trade worries.
On Wall Street the Dow Jones industrials added 38.36 points to close at 8,413.94, recovering from a midday decline that took the index to as low as 8,318.
The Dow’s close left it about 38 points shy of Wednesday’s record of 8,451.06. Still, the index rose 43.84 points for the week.
In the broad market winners topped losers by 1,554 to 1,366 on the New York Stock Exchange on Friday, and were nearly evenly matched on Nasdaq.
The Standard & Poor’s 500 and the NYSE composite both advanced to new highs, with the S&P; up 5.93 points, or 0.6%, to 1,034.21.
But among smaller-stock indexes, the Russell 2,000 slipped 0.05% to 453.99. Year-to-date the Russell index is up 3.9% while the S&P; 500 has gained 6.6%.
Analysts attributed much of Friday’s action to bargain hunting after Thursday’s slump, and last-minute activity associated with the “double witching” expiration of individual and index options.
But “the money continues to gravitate into a narrower and narrower group of stocks,” said John Cleland, chief investment strategist at Security Benefit Group in Topeka, Kan. High values for blue-chip stocks should make a case for buying shares of smaller companies, he said.
Elsewhere, bond yields edged up ahead of Tuesday’s congressional testimony by Federal Reserve Board Chairman Alan Greenspan, although the Fed chief is expected to be upbeat about the economy and inflation.
The 30-year Treasury bond yield ended at 5.87%, up from 5.85% Thursday, but unchanged from a week earlier.
The dollar, meanwhile, rose broadly amid disappointment over Japan’s economic package ahead of a weekend meeting of the Group of Seven industrialized nations.
The dollar was at a record high against the Mexican peso, which tumbled after uncertainty over Mexico’s January trade balance increased on news that the data will not be released until Tuesday.
The peso ended at a record low of 8.59 to the dollar, versus 8.55 on Thursday. Investors are fearful that Mexico may be hurt by increasing competition from Asia, where currencies have been sharply devalued.
Among Friday’s market highlights:
* Merck, the Dow’s biggest gainer on Wednesday and its biggest decliner on Thursday, retook its leading role on Friday, rising $2.44 to $124.69.
* American Express, another big loser on Thursday, rose $1.31 to $88, as the Dow’s second strongest component, helping offset losses by AT&T;, down $1.38 to $62, and Alcoa, down $1.25 to $72.25.
* In a mixed bag of tech-issue trading, Ciena slid $16.13 to $42 after warning of weak second-quarter profit because WorldCom delayed orders. Ciena makes products that increase the transmission capacity of fiber-optic cable. WorldCom rose 56 cents to $39.
* Dell Computer rose for a sixth straight day, climbing $3.56 to $126.31 in the wake of its unexpectedly strong earnings report.
* But Smart Modular Technologies slumped $5.81 to $30.19 after the maker of computer memory devices issued a poor forecast.
* DoubleClick, which sells banner ads for Web sites, soared $9.75 to $26.75 in its first day of trading.
In commodities markets, oil prices were flat, with March crude oil closing 1 cent lower, at $16.15 a barrel, on the New York Mercantile Exchange, despite the continuing U.S.-Iraq war of words.
Silver prices, meanwhile, fell sharply as speculators continued to take profits from the recent rise to 9 1/2-year highs and as doubts about any strong further rally from investor demand set in.
Silver for March delivery fell 29.7 cents, or 4.4%, to $6.52 an ounce on the Comex.
Market Roundup, D4
